an abundance agenda

Not for the clashing of sabres,
For carnage nor for strife;
But songs to thrill the hearts of men
With more abundant life.

-- from Songs for the People by Frances Ellen Watkins Harper

To become a more just and sustainable society, we must produce a lot. For instance, to improve affordability and address homelessness, we need much more housing. One estimate claims that we need 7.3 million additional lower-cost rental units. But the graph above this post shows a long-term decline in new housing starts per capita.

We also need windmills and solar panels, more and better transmission lines, batteries, electric vehicles, commuter railway lines and intermodal transit points, heat pumps, and urban trees.

All this production will weigh on the environment, but I don’t see any path to a sustainable economy that doesn’t involve first making a lot of new things that replace the machines we depend on now.

The graph below shows rising production of renewables along with steady production of oil and coal. We need the former to accelerate, which should also push the latter down:

Trends in oil and gas production and renewable energy production, from St Louis Fed.

Regulation is important for health, safety, and other values, but it doesn’t produce stuff. Regulation can be a barrier to production, although the severity of that problem is open to debate. Certainly, regulations must be smart, efficient, and mutually consistent.

Redistribution is necessary to address inequities, but it is not the way to create abundance. To be sure, when disadvantaged people receive support, they are able to buy things, but that may not boost the total supply of the things we need. Besides, once we produce more, we can choose to distribute more.

Governments can boost supply by buying things. The massive Biden investments in green technologies and microchip manufacturing are at least well intentioned and may turn out to be crucial. However, the private sector is going to produce most of what we need, even if governments are important customers or investors. The question is how to expand the private production of good things, such as affordable housing and renewable power.

Steve Teles and Ron Saldin discuss an abundance agenda in political terms, presenting it as a response to certain tendencies on both right and left. They argue that abundance may create a new alignment and counter partisan polarization, which is rooted in zero-sum competition. They compare an abundance agenda to the Progressive Movement, which formed strong factions within both major parties. In the 1912 general election, three presidential candidates competed to be the best progressive, offering different but comparable interpretations of what progressivism meant.

Progressivism wasn’t about abundance, but their analogy is political. An abundance agenda could scramble the political spectrum today, as progressivism did from 1900-1924. Teles and Saldin argue that only the Democratic Party is really hospitable to abundance right now, for Trump has a “hold on the GOP.” But they envision a somewhat longer timeframe.

I find their political analysis interesting, and I am open to the argument that abundance could counter hyper-partisanship. However, I would separate political arguments from substantive policy issues. For the good of people and the planet, we must produce a lot more good things very soon, and that goal should determine our political strategies. In other words, we shouldn’t produce more to reduce polarization, but scrambling the political spectrum might help us to produce more of what we need.

See also: tracking the Biden climate investments; the major shift in climate strategy; class inversion as an alternative to the polarization thesis; The New Progressive Era.

The post an abundance agenda appeared first on Peter Levine.

calling youth to government service

According to the 2020 American National Election Study, 63% of people under 30 thought that the government should be doing “more things,” versus just 37% who thought it should “do less.” Yet few young Americans even consider working in the civil service.

At Harvard’s Kennedy School of Government, where “Ask what you can do for your country” is engraved on the wall, 44% of the graduating class of 2022 took jobs in the private sector, 22% for nonprofits, and 28% for any government. From my beloved Tufts University, where students tend to be very idealistic, 6% of the undergraduate class of 2022 will work for “Government, Law, Public Policy, [or a] Think Tank.” I suspect public sector employment represents a small proportion of that 6%.

The role of the federal government expanded substantially in 2021-2 with the passage of the $1.9 trillion American Rescue Plan, the $739 billion Inflation Reduction Act, and the $280+ billion CHIPS Act. Yet young people have not heard a call to go to Washington to make these new programs work.

Some colleges and universities produce large numbers of public employees, especially teachers and law enforcement personnel. I am grateful to them and believe that a degree of class bias explains why such jobs are less popular at institutions like Tufts and Harvard. Still, the civil service is a different category than regular public sector employment. At several points in our history, government service has attracted people who have advantages and cultural capital. Not so today.

Some reasons are on the demand side. The Partnership for Public Service says that the federal “hiring process is long and complicated,” the “pay system is antiquated,” and “opportunities for young people are hidden and scarce.” The Partnership and others–including some civil servants–are working on those problems. It’s easy for me to criticize without helping with the solutions. But these challenges need attention.

The supply side is also important (and more related to my work). Recent college graduates are not just avoiding public sector careers because of clunky hiring processes and antiquated pay grades. Many of them are against it.

From one direction, there are lots of left-wing students who might (or might not) vote for Bernie Sanders and his promise to expand government, yet who deeply distrust the national government of the USA. For them, the word “state” often comes with adjectives like “carceral,” “neoliberal” or “colonial.” Why work for that kind of organization?

From the opposite direction, I think many people have absorbed the lessons of public choice theory, which is presumptively skeptical about government.

Antony Downs offers a classic statement (Downs 1957). He writes that no economist would “advise monopoly corporations to increase social welfare by cutting prices.” We assume that a corporation is self-serving, and we consider changing its incentives by boosting competition or regulating it. Nevertheless, Downs says, people routinely call on government to maximize the public good without considering the motives of the people who actually operate the government (p. 283). This is naive.

Downs acknowledges that some individuals act altruistically, but he makes the simplifying assumption that people generally direct their own behavior “toward selfish ends” (p. 27). That premise leads him to the following assumptions about government: politicians and parties try to gain and retain office, bureaucrats strive to expand their budgets and personnel allotments, and citizens collect political information and vote only insofar as that will benefit them personally. “They treat policies purely as means to the attainment of private ends” (p. 28).

There is then little point in advising a government to do better. The only strategies that can work are to alter the incentives of public employees or to reduce the size of the state.

Downs assumes bounded rationality and limited cognitive capacity, but he emphasizes people’s selfishness. In An Economic Theory of Democracy, he never cites his contemporary, Friedrich Hayek, for whom cognitive limitations were more important than bad motivations. For Hayek, the main problem with government is that it cannot know how to allocate resources, because understanding a whole society is just too hard. In contrast, markets generate reliable signals in the form of prices.

My view is that both left-wing anti-institutionalism and public choice theory offer genuine insights. They both conflict with social democratic theories, which are similar to the ideals of the New Deal and Great Society and Biden’s “Build Back Better” agenda.

In that case, one might ask which theory is right, but that’s not how I would proceed. I acknowledge that there are truly bad ideologies–based on immoral premises–that are very unlikely to yield beneficial results. Leaving those ideologies aside, I see grand social theories less as hypotheses that can be proven true or false (or right or wrong) than as forces that motivate and orient people.

A social democratic ideal can draw people to work for (or alongside) a national government and to build excellent public programs. A critique of government can inspire people to build private-sector alternatives that also do good. Although it’s worth thinking critically about these contrasting assumptions and predictions, much more depends on who responds to each ideal and what they do together.

The example I give in What Should We Do? (2022) is public schooling. Movements for universal public education arose in countries like Prussia and the USA during the 1800s. It was never true–nor was it false–that mandatory, public funded schools are good for children or a society. Some are good, some are not. The public education movement, however, had inspiring ideals, and it launched the professions of teaching, educational research, educational administration, and teacher education.

Since then, people in those professions and their allies have tried to make public schools work. At times–being human–they have failed or have even failed to try. Reform movements have arisen that offer various prescriptions, such as progressive pedagogy, choice and competition, or measurement and accountability. Again, I doubt that any of these prescriptions is right or wrong, but each has created a new field of practice and new organizations that have done some degree of good (and harm).

By the same token, the competence, fairness, and responsiveness of government are variables, not constants. Some bureaucracies behave worse than in Downs’ model, because he explicitly assumes (p. 30) that officials will follow laws, which is often not the case. But some public agencies perform much better than he would anticipate, because they attract talent and develop impressive professional cultures. Downs’ assumption of selfishness is a priori, not empirical. Real people go into public service for a variety of complex reasons, some quite impressive. (By the way, if they were strictly motivated by economic self-interest, they wouldn’t serve at all.)

Allocating enough money matters, and the Biden spending bills are helping with that. But as long as Congress is a poor deliberative body, and as long as federal agencies are sclerotic and distant, the money will not be spent very well. Cash alone will not maximize social or environmental outcomes, and it definitely will not raise public support for government. Nothing alienates more than an unresponsive bureaucracy, even it sends you a check.

What we need now is a large, energetic, youthful, and diverse movement that wants to transform government to be more effective, wise, and responsive. That movement would not negate the insights of leftwing anti-institutionalism or of public choice theory, but it would treat those ideas as diagnoses and would look for cures.

Source: Downs, Anthony, An Economic Theory of Democracy (Addison Wesley 1957). See also the Green New Deal and civic renewal; using federal spending to strengthen democracy; putting the civic back in civil service; on the Deep State, the administrative state, and the civil service.

1984 all over again? The Reagan/Biden analogy

The Biden team is preparing for a Reagan-style victory lap in the event that the economy looks healthy in 2024. I hope they are also prepping for more difficult circumstances, since the economic forecast is highly uncertain. However, for what it’s worth, Morgan Stanley “now projects 1.9% GDP growth for the first half of this year.”

These are my prior assumptions:

  1. A president has limited and ambiguous impact on macroeconomic trends. Too many other factors matter, from the Federal Reserve and Congress to the business cycle, and from wars and technological developments to the budgets of 50 states.
  2. Although many people vote on other grounds, enough marginal voters are influenced by recent changes in the economy that those trends predict the results of presidential elections.
  3. People cite the economic and electoral fortunes of each presidential administration to support their ideological positions. For instance, the apparent successes of FDR and Reagan were used to vindicate New Deal liberalism and neoliberalism, respectively.
  4. Economic trends influence public opinion, but they do not determine the outcome of the debate about ideology. Eisenhower, Clinton, and Obama are examples of presidents who saw healthy net economic growth and were reelected, yet their administrations did not move public opinion as FDR’s and Reagan’s did. The big shifts in opinion seem to reflect changes in the Zeitgeist, not just electoral and economic developments.

Applying #1 means that Biden’s policies will not affect the economy much in 2024, even though Morgan Stanley believes that he is responsible for the upturn. According to #2, Biden will win pretty easily if growth is robust but could lose to Trump or another Republican if it stalls.

Per #3, if the economy grows and Biden wins, the President and many Democrats will argue that the reason was his industrial policy, which is aggressive, green, and pro-equity. I favor the policy, so I will be hoping that this argument sticks, even though I believe that macroeconomic trends are out of his hands.

If the case for Bidenomics does persuade, it will be thanks to the Zeitgeist. To make that explanation a little less mystical, I would focus on two factors.

First, the previously dominant neoliberal view really is fading now, much as late-Victorian laissez-faire was faltering by 1932 and New Deal liberalism had run its course by 1980. By a certain point, established theories don’t offer plausible solutions to the problems of the day, but alternatives do. By the time FDR took office, his home state of New York and several others had already moved in the direction of the New Deal; Roosevelt took the opportunity to bring their ideas to Washington. Likewise for Reagan in 1980–and for Biden in 2020. Indeed, Trump is no neoliberal, and there will probably be no national candidate who runs on cutting taxes and spending.

Second, the demographic basis of politics has shifted. I avoid crude materialistic and class-based predictions, yet the people who have the most to gain from low taxes and light regulation are business owners and investors. They are now outweighed in the GOP (which they once controlled) by working-class voters. They are represented in the Democratic Party, but outweighed there, too, by diverse lower-income voters, public sector workers, and salaried professionals.

The tectonic plates are shifting, and it’s at such moments that presidential administrations become examples or even metaphors for fundamental change. We had a “new deal for America” and then saw “morning in America” once the actual New Deal state faltered. The opportunity to make another such shift is a good reason to run a celebratory campaign in 2024–if (but only if) the economy holds up.

See also: federal spending for both climate and democracy

federal spending for both climate and democracy

Two huge problems may have the same solution. If this is true, it makes a powerful case for the main strategies of the Biden Administration.

The first problem is climate change, disastrous for both natural ecosystems and human lives and welfare. Underlying that problem is the fact that many constituencies around the globe benefit from burning carbon: not only authoritarian governments and powerful corporations (although they deserve the most criticism), but also regular communities and the parties and unions that represent them. As long as people who benefit in the short run from burning carbon have preponderant political weight, it is hard to pass truly satisfactory policy solutions.

The second problem is the marked tendency of poorer people to vote for the right, not only in the USA but in many other countries—in an eerie echo of the 1930s. Parties of the right that have lower-income constituencies cannot offer their voters tax cuts or deregulation. Instead they typically promise to strengthen the state to the exclusion of–or even against–minority groups or foreign populations. Unlike libertarianism, this form of politics has no natural limits; state power can keep ratcheting up until it reaches genuine fascism. Meanwhile, the center-left parties that are left with relatively upscale voters may try to defend individual rights, but they won’t address deep social inequities.

Federal finding authorized by Congress in Biden’s first two years addresses both problems. It tilts toward poorer districts (including those that are predominantly white and nowadays Republican) and green industries. The “theory of change” might be: 1) use federal funds to 2) “leverage” private investments in new industry that 3) mitigate climate change while 4) providing good jobs, thereby 5) building constituencies for green policies.

I am all for also using other strategies simultaneously, such as regulating or taxing carbon and divesting. I just think the Biden theory of change may be a necessary complement.

The map with this post (from the White House website) shows the locations of private investments in clean energy, batteries, and biomanufacturing that have been leveraged by new federal spending in the Biden years. Many observers have noted that a majority of this money–perhaps two-thirds–goes to districts represented by Republicans, who generally voted against the bills. I would draw attention to the concentration of projects along the Appalachian spine and in the heart of the Rust Belt. These are poor regions that happen, today, to be dominated by Republican representatives.

The effects are not yet evident in polling. In Pew’s June survey, 62% of all Americans disapprove of Biden, 41% very strongly. He receives net approval from college graduates but the disapproval of 66% of people with high school diplomas or less. He performs best among those who classify themselves as upper income and faces 2-1 disapproval among everyone else. Fifty-six percent of whites without college strongly disapprove of him, as do 57% of rural people.

This political strategy will take several years to work. People will have to see clear and sustained benefits from state action that is both equitable and green. The argument must begin now, but it will take time to change minds.

Energy Secretary Jennifer Granholm and some of her cabinet colleagues are visiting the locations of major new investments, most of which are in Republican districts. If Granholm were trying to affect the 2024 election, this trip would probably be a waste of her effort, since many of these districts are very safe for the GOP. For instance, she recently visited the district of Rep. Patrick McHenry, who won his last reelection by 45 points. Transportation Secretary Pete Buttigieg is going to Kentucky’s fifth district, which GOP Rep. Hal Rogers won by 65 points last time and which has been Republican since 1962. These trips may generate some social media calling out Republicans’ hypocrisy, but that won’t change minds. However, I do think actual jobs can shift people’s fundamental beliefs about both government and climate. For that purpose, both the federal spending and visits by Democratic leaders to tout it can be seen as highly promising.

See also: the major shift in climate strategy; Civic Engagement in American Climate Policy: Collaborative Models; social class inversion in the 2022 US elections; class inversion as an alternative to the polarization thesis; the social class inversion as a threat to democracy; investing in the Appalachian cities

whether to make the election a referendum on MAGA

In an interesting conversation between Ryan Grimm and Dimitri Melhorn (who represent two very different strands in today’s Democratic Party), Melhorn says:

So, imagine you’re the average voter, and you’re saying, OK, there are three things you can choose to believe about politics, and adjust your behavior accordingly. One, politics can do nothing for you. Two, politics can make your life better. Three, politics can make your life worse. People will believe the third. They normally default to the first, but they will believe the third. Within a rounding error, for electorally viable purposes, nobody believed the second, other than Bernie [Sanders] and his staffers and, you know, some other folks. It doesn’t work that way. I wish it did. It doesn’t.

I won’t dispute that Dmitri is right about the USA right now, and perhaps his theory would apply in Britain and much of the EU. It’s hard to persuade undecided voters that new or different leaders or policies will improve their lives. They are ready to believe that some current proposals would hurt them, and this fear can persuade them that voting matters. In turn, many of the current proposals that frighten the most Americans come from the hard right. Thus, Melhorn argues, the path to a Democratic victory is to make the election a referendum on right-wing ideas while downplaying ambitious progressive ones.

Although Dmitri may be correct about the present, this can’t be a law of nature. Surely FDR persuaded Americans that “politics can make your life better.” Maybe Roosevelt didn’t need a positive case to win against Herbert Hoover in 1932, but he and his party did argue for a New Deal, and the result was a whole new social contract, not only some electoral victories. Likewise for Clement Atlee in Britain (1945-51) and many other cases. Skepticism about the positive potential of elections and policy is a particular feature of our time.

Nor is skepticism universal now. In the 2020 American National Election Study, when presented with a forced choice, 42% of adults said “the less government, the better,” but 58% said there are “more things government should be doing.”

I would acknowledge that general pro-government sentiment doesn’t always translate into support for actual candidates who propose to do specific things. For one thing, almost a quarter of those who voted for Trump wanted government to do more, and they may not have the same kinds of interventions in mind that I do. Worse for progressives, the level of openness to more government was weakest where government might do the most good. In 2020, people without any college experience were split 50%/50% on the value of more government, whereas those with bachelor’s degrees favored more government by a 36-point margin (68%-32%). Black people were nine points less likely to support increasing government than white people (60% vs. 68%).

This class inversion has profoundly bad implications for our politics (and not just for progressives), but it is not historically typical. It’s a trap we must get out of.

During the Biden Administration, Democrats are actually making dramatic policy changes that might–if they succeed–make people’s lives better. When the Inflation Reduction Act passed last August, it was predicted to provide $270 billion in tax credits for green energy and manufacturing. Now the CBO is projecting the law’s cost at $553 billion. Goldman Sachs predicts that the “law will cost roughly $1.2 trillion — three times more than the official government forecast — and spur trillions more in private-sector investments.”

These estimates are being circulated as evidence of a budgetary problem, but for me, they are hugely hopeful (if true). Several trillion dollars in green investments could save the planet and improve people’s lives. Arguably, Congress recently enacted those policies.

It would therefore be ironic if Democrats’ best path to reelection was to make voters fear Republican ideas while offering largely symbolic proposals of their own, such as background checks for guns. That is like smuggling a new social contract past the voters.

Again, I would not be surprised if “Stop Republican craziness” polls better than “We are the midst of transforming the economy.” But that is a symptom of deeper troubles. The situation was different during the Clinton Administration, when Democrats actually did little except to block some GOP proposals. But during the Biden years, when the party is beginning to transform the economy, not to be able to run on that record is very odd.

See also: class inversion as an alternative to the polarization thesis; social class inversion in the 2022 US elections; using federal spending to strengthen democracy

using federal spending to strengthen democracy

The federal government is authorized to spend an additional $2 trillion over the next 10 years through the Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act. I support many of the priorities in these laws.

But government spending should be democratic–at several levels. Operating in a democratic way is consistent with justice and is most likely to be sustainable, because people will feel relatively supportive of government programs that engage them. This is the version of social democracy or Great Society liberalism that I can get behind.

What does spending money democratically mean? First, a fairly elected, deliberative legislature should allocate the funds into large categories. That pretty much happened with these bills (acknowledging many imperfections).

Then the federal agencies and state and local governments that administer the funds should engage relevant communities in deciding how to spend the money in detail and should form partnerships with groups (which may not be federal grantees) to accomplish the intended outcomes of the spending. Finally, the funds should allow many people to be hired and given a voice in the programs–including those who do the blue-collar work.

Spending on public transportation is a good example. The White House says there will be “$89.9 billion in guaranteed funding for public transit over the next five years — the largest Federal investment in public transit in history.” This investment has potential benefits for climate, racial equity, and convenience and quality of life.

States and cities will receive portions of this money. They should give their communities appropriate voice in deciding what and where to build. They should form partnerships with community groups whose goals align (e.g., community development corporations that can build dense housing near the transit). And they should employ workers–often via contracts with businesses–who have a say and who see pathways to influential Green careers.

This approach is inconsistent with libertarian conservatism, which opposes the spending in the first place. It is also inconsistent with technocratic progressivism, which views community engagement with deep skepticism. Doesn’t “engagement” mean NIMBY groups that block valuable projects in their neighborhoods, well-resourced companies that grab government contracts, and process-driven delays that dilute the benefits for both environment and racial equity?

The truth is, public engagement must be done well. A one-time public meeting in which citizens line up at the microphone to yell at public officials–that is a recipe for disaster. A worthwhile process takes planning and money. It requires training and technical support for the federal civil servants, local public employees, and activists who are involved. Since no single training program can accomplish very much, success requires building experienced bodies of employees who have run processes before and have learned to do them better.

We have not tried this approach for many decades in the USA–not since the Great Society, which tried various experiments in community engagement under the heading of “Maximum Feasible Participation” (with mixed success).

Reagan depicted government as the problem, although federal outlays per capita, adjusted for inflation, rose rapidly during Reagan’s term and only stabilized under Clinton. Also, despite a rhetorical commitment to hiring contractors instead of career civil servants, the civil service actually grew in that era. However, I think that federal capacity for public engagement shrank, outside of certain notable programs. More importantly, Congress launched or redesigned very few social programs after the late 1960s. That means that most federal money has flowed into well worn channels, offering limited opportunities for deliberation about what and how to spend.

Then, when the Obama Administration got a chance to allocate a substantial amount of new money in the 2009 stimulus, the progressive technocratic approach clearly won out. Efficiency was the by-word. Funds went to “shovel-ready” projects that were seen as offering the quickest return, or to initiatives informed by behavioral economics that were supposed to “nudge” people without them even being aware, or to competitions (like “Race to the Top”) that were meant to leverage non-federal funds. There was no sense that the public would be involved in defining and solving national problems along with the federal government.

Democratic spending is the path not taken, at least not since ca. 1965. We should find out whether it can produce sustainable, popular, and fair social outcomes in ways that we have not seen in my lifetime. That requires:

  • Setting aside tiny but real percentages of the federal funds for democratic and deliberative processes and for the training and technical assistance that they require. I am not sure to what extent those purposes are authorized under current law. If it is impossible to spend federal funds this way, then philanthropy should step up.
  • Considering new rules, such as offering special grants to communities that can demonstrate that they have reached agreement about priorities across traditional lines of difference, such as race, partisanship, or urban/suburban/rural divides. I’d be especially interested in agreements that bridge distant communities, such as coal towns and East Coast cities.
  • Intellectual leadership: influential people should articulate the value of public engagement. In the Obama Administration, the president did that, albeit somewhat vaguely. No members of his cabinet and hardly any liberal public intellectuals backed him up. The stimulus package and Obamacare came across as strictly technocratic and were assessed only for their outcomes (while democratic culture waned). We need more effective voices to defend democracy this time.

When David Meyers of The Fulcrum asked me yesterday to comment on the fact that the public identifies “the government” as the biggest problem facing us today, I replied that the most promising solution is to spend money democratically. My reply was rooted in the best traditions of the New Deal and Great Society (as I see them), but it’s a fairly marginal view today. It’s an alternative to three prevalent assumptions: that democracy is mostly a matter of fair electoral processes, that activated citizens are often a nuisance, and that protecting democracy means uplifting some kind of political center. I think we must exercise power to improve the world, but do so in ways that empower our full diversity of people in their roles as citizens.

See also: the Green New Deal and civic renewal; the new manipulative politics: behavioral economics, microtargeting, and the choice confronting Organizing for Action; Democrats as technocrats; Hillary Clinton on spending for infrastructure; the long march through institutions–for civic renewal; the big lessons of Obamacare; empowering citizens to make sure the stimulus is well spent; etc.

class inversion as an alternative to the polarization thesis

One deep story that’s being told about our current political crisis invokes polarization: two “poles” or ends of the spectrum are seen as moving apart and growing mutually hostile. That is a symmetrical metaphor. A different deep story emphasizes the anti-democratic and anti-constitutional turn of MAGA-style Republicans. I would add a third model that involves both parties, but not in a symmetrical way. It is also less about ideas and policies than interests and identities. It’s a story of inverted partisanship.

Envision a democracy with two main parties or coalitions. The left party favors more taxing, spending, and regulation and draws most of its votes from the lower half of the economic scale. The right party opposes government economic intervention and draws its support from the upper half.

This kind of system can be frustrating, since the median voter (who probably comes from the middle of the economic scale) often wields the deciding vote. Both socialist and libertarian principles are somewhat disfavored. However, if you are a socialist or a libertarian, you should believe that you can convince the median voter of your ideas. Meanwhile, the debate is a good one, because citizens can determine the role of government. And both sides are constrained. The left may want lots of government, but as taxes and regulation rise, so will resistance. The right may love markets, but cutting government deeply also creates opposition. The whole system is pretty stable–for better and worse–and it tends to reward ideas that benefit most people.

Now switch the demographics of the parties, so that the rich vote for the left and the poor vote for the right. In that situation, the left will not really do anything substantial to promote equity, because that would cost its affluent voters. You will see lots of virtue-signaling; superficial policies, hypocritically applied; and odd priorities, such as forgiving college debt but not medical debt. Meanwhile, the right will not get far by cutting taxes, since low-income people pay little or no income tax. The right will look for other ways to benefit its constituency, probably including appeals to racial, national, and/or religious identity.

In this situation, the path to ambitious progressive policies is blocked by the left party itself, while the right party is prone to dangerous escalation. You’ll see statements like John Daniel Davidson’s “We Need To Stop Calling Ourselves Conservatives” in The Federalist (Oct 22). Davidson floats adopting a “pro-worker, even pro-union political agenda that once belonged to the left” and displaying “a willingness to embrace government power.” But to what end? “Drag Queen Story Hour should be outlawed,” “parents who take their kids to drag shows should be arrested and charged with child abuse” and “teachers who expose their students to sexually explicit material should not just be fired but be criminally prosecuted.”

Davidson is not a political strategist, and many of his ideas would poll very poorly. In that sense, his own agenda would be constrained by voters. However, partisan political entrepreneurs on the right can develop cannier agendas that win Republican primary elections and legislative majorities in selected states and give them substantial power. They will not arrest parents for attending constitutionally protected public events, but they will arrest Black men for registering to vote in good faith or transport asylum-seekers to Martha’s Vineyard.

I think a model of a class inversion is more informative than one of “polarization,” which assumes that two durable coalitions have moved apart. In contrast, the inversion model presumes that some people have changed their parties–like the Obama-Trump voters of Luzerne County, PA.

There are signs of this class inversion in many democracies today. However, the picture in the USA is mixed, because wealth, race, and education don’t push in the same directions. Right now, according to the Washington Post-ABC poll, household income does not predict people’s opinion of the 2022 election very well. Democrats perform just a touch better among households earning less than $50,000 per year, and Republicans do better above that threshold, but the whole graph (see above) is pretty flat. That’s because income and being white correlate with support for Republicans, whereas education and being black correlate with Democratic support. The result is our somewhat mixed situation, in which the parties fumble between their traditional roles and inverted ones.

I am fully aware that race is at the heart of the issue in the United States–as it has been all along in this country. However, that observation should be the beginning of the conversation, not the conclusion. If the parties invert their class positions because of white racism, then the whole system is in trouble. Socialists, moderates, libertarians, and constitutionalists should all be alarmed. Again, this is not a new threat today; the end of Reconstruction offers a frightening precedent. But it will be a tough trap for our republic to escape.

Real constitutionalist conservatives have critical work to do on their side of the aisle. Meanwhile, Democrats need to win the votes of more low-income whites, whether that means taking Heather McGee’s advice to explain how racial injustice also harms whites, or taking Ruy Teixeira’s advice to reclaim patriotism and certain traditional values, or running campaigns like Tim Ryan’s in Ohio, or simply doing more to benefit low-income communities that include a lot of white voters.

See also the social class inversion as a threat to democracy; social class in the French election; why the white working class must organize etc.

Four perspectives on student debt forgiveness

  1. Radical: Debt is the linchpin of a predatory global political-economic system (Graeber 2011). Canceling a portion of one form of debt strikes a blow at this whole structure. It demonstrates that victories can be won—particularly because the president was reluctant to take this step and did so under pressure. The victory will encourage people to think of themselves as debtors with political power, which is a potent identity. If canceling debt weakens the existing economic system (for instance, by encouraging individuals to borrow in the hope of having their loans canceled), that is a feature, not a bug. Another blow will be struck when other groups demand the cancellation of their debts as a matter of fairness. (“Biden helped the college kids—what about those of us with medical bills?”) This policy will look successful in retrospect if it turns out to be merely the first of many cancellations.
  2. Social democratic: The measure of a policy is how much it helps the least advantaged. However, it is wise to design programs to benefit relatively large and empowered populations as well as the neediest, so that such policies are enacted and survive. For instance, European welfare states rely heavily on value-added taxes, which are regressive, and they provide cheap or free college for all (including those who could have afforded college by themselves). Such policies have proven durable. Similarly, in the USA, Medicare and Social Security have been sustained, while means-tested welfare programs have been cut because they have poor constituencies. Forgiving student debt has the same kind of structure. According to a Penn Wharton analysis, people between age 25 and 35 who are in the bottom income quintile will get 13.5% of the benefits of the forgiveness, while people in the top 40% of income will get about 24% of it. The Penn Wharton analysis does not consider race, but NCES reports that Black people with any college debt owe a median $1,810, which is almost three times as high as White people’s median debt ($630). Thus the Biden policy should have progressive effects with respect to race (while also benefiting many White people and omitting Black people who didn’t attend college). This doesn’t sound impressively equitable; boosting financial aid would be a better policy. However, the constituency for financial aid consists of current or prospective college students who demonstrate need, and that group is too politically weak. Besides, the White House decided that Biden could forgive debt by executive order, while Congress would have to pass other reforms; but Congress hardly ever passes a controversial bill.
  3. Interest-group pluralist (Lowi 1979): Biden was elected with a coalition that included a disproportionate number of younger people with college degrees, and he performed best in the $50,000-$100,000 income range. Biden voters have diverse interests, but college graduates (and their parents) are more concentrated, better led, and more culturally and economically potent than other Democratic interest groups. As part of the governing coalition, they successfully demanded a benefit. Biden complied. Interest-group pluralism predicts that they will next seek other benefits for themselves, without supporting a radical economic restructuring or any serious attention to other groups, such as older people with medical debt or farmworkers. If colleges and universities capture some of the benefits of the debt-cancellation (by raising tuition in the expectation of another cancellation later), so be it: their faculty and staff are core to the Democratic coalition. This is what interest-group pluralism predicts. As Lowi notes, it does not judge, because it considers judgment unscientific. Politics is nothing but the clash of interests. Last week, people with college debt won a round.
  4. Market-utilitarian: Markets produce wealth; governments may use taxes and regulations to encourage, discourage, or subsidize behaviors when necessary for the aggregate good. Forgiving debt after it has been incurred cannot incentivize education, but it can create moral hazard, which distorts markets. Colleges will grab most of the benefits. We know, for example, that when the stock market boosts college endowments, those institutions spend the money to increase their own selectivity and do not offer more financial aid (Bulman 2022). Debt-cancellation may be inflationary, yet the biggest problem facing the economy right now is inflation. For these reasons, the policy is foolish.

I must admit I don’t foresee radical results following from Biden’s debt cancellation (per #1). David Graeber endorsed forgiving student loans (p. 544), but he expected a global movement against debt to take centuries. On that time scale, I am confident that our current system will change. But between now and 2024 or 2050–I don’t think the conditions are in place.

I am not equipped to assess mainstream economists’ arguments against the new policy (#4), and I doubt that we will know—even in hindsight—whether debt forgiveness increased inflation or tuition prices or created moral hazard (for good or ill). For one thing, the policy is relatively modest compared to other recent interventions.

I think the difference between #2 or #3 is important. A lot depends on how people—a wide array of people—describe and interpret the new policy.

If many Americans decide that the Democrats now represent college kids (#3), that interpretation will reinforce a class inversion that is one of the most serious threats to democracy. When the center-left party that is willing to employ government as an instrument for social welfare looks elitist, the right wing will offer chauvinistic nationalism to pick up workers’ votes. Meanwhile, a center-left party that depends on the votes of more educated people will drift toward elitist policies.

I know that many people with college debt are not “elite” by any measure. Nevertheless, favoring college education looks elitist when about 55% of adults do not hold a BA, and 38% never enrolled in college, yet almost all of the nation’s leaders all hold college degrees.

On the other hand, if Americans conclude from this experiment that their government can help people, and therefore it should do something for those without any college experience (#2), that would be a positive step. Americans will be more likely to reach this conclusion if, indeed, the government next does something tangible for working-class people without college debt.

The Fall of Robespierre changed history because of how French people reinterpreted it about a year after he met the guillotine. So too, Biden’s debt cancellation will matter because of the story that American tell themselves about it in 2024 and later.

Sources: David Graeber, Debt: The first five thousand years (New York: Melville House, 2011); Theodore J. Lowi, The End of Liberalism: The Second Republic of the United States (Norton 1979); Bulman, George, The Effect of College and University Endowments on Financial Aid, Admissions, and Student Composition, NBER working paper 30404. See also: the social class inversion as a threat to democracy; a conversation with Farah Stockman about American Made: What Happens to People When Work Disappears; the weirdness of the higher ed marketplacethe new elite is like the old elite; etc..

social class in the French election

The left should represent the lower-income half of the population; the right should represent the top half. When that happens, the left will generally advocate government spending and regulation. Such policies may or may not be wise, but they can be changed if they fail and prove unpopular. Meanwhile, the right will advocate less government, which (again) may or may not be desirable but will not destroy the constitutional order. After all, limited government is a self-limiting political objective.

When the class-distribution turns upside down, the left will no longer advocate impressive social reforms, because its base will be privileged. And the right will no longer favor limited government, because tax cuts don’t help the poor much. The right will instead embrace government activism in the interests of traditional national, racial or religious hierarchies. The left will frustrate change, while the right–now eager to use the government for its objectives–will become genuinely dangerous.

This class inversion is evident in many wealthy democracies, although usually with exceptions and complexities. For instance, in the USA, Democrats now represent the 17 richest congressional districts and most of the richest 50. Put together, Democratic districts are wealthier than Republican ones, although Democratic candidates often win a bit more of the vote below $50,000/year than above that income level. It’s in this context that we now see Republicans eager to use state power against private companies on cultural issues.

A similar inversion was evident in France this week. The class called “cadres” could be translated as executives, although I understand that it is a larger category than that English word implies. Among the cadres, Macron (a centrist technocrat) won and Melenchon* (from the left) came in second, with Le Pen (right-wing) drawing only about 12%.

The “intermediate professions” split their votes about evenly. This is a large and diverse group (26% of all employees), ranging from teachers to technicians. I would guess that sub-groups within this 26% voted quite differently from each other.

At the bottom of the scale–the ordinary employees and workers–Le Pen won by pretty substantial margins. Melenchon edged out Macron among these two categories, but he ran far behind Le Pen. If we look instead at wages, Macron performed better at the higher end, while Le Pen and Melenchon split the lower end about evenly. Macron won the most retirees and came in third amongst the young.

In the first round, French voters had numerous choices, and three candidates finished pretty close to even. That makes the outcome somewhat difficult to compare to a two-party contest between left and right, as in the USA. But one could envision Biden as a kind of hybrid of Macron and Melenchon (we can debate which one he is closer to), and Le Pen as Trump. Then the class inversion is clear.

This pattern is by no means exclusive to France, but it presents dangers wherever it appears.

I do perceive France as combining relatively egalitarian economic policies with a particularly sharp gradient of prestige and power. As the figure below shows, France uses taxation and spending to transfer far more cash than the US does (albeit mostly to pensioners), yet an extraordinary proportion of French business, cultural, and political elites attend a few Parisian schools. This means that a welfare state that redistributes a great deal from rich to poor has a culturally elite look. That may be a refined version of an international problem.

Joumard, Pisu & Bloch 2012

*This blog isn’t letting me use accent marks, unfortunately. See also: the social class inversion as a threat to democracy; what does the European Green surge mean?; and why the white working class must organize

the social class inversion as a threat to democracy

It is important for left and center-left political parties to rely on lower-income voters, who–nowadays–are also people with less educational attainment. Then the left’s political leadership will be accountable to disadvantaged people. Since they identify with the left, they will try to serve their core voters by promising more funds and more regulation. I generally favor such policies, but even if you do not, you should acknowledge that taxing, spending, and regulating are compatible with a constitutional democracy. If you want to oppose the left, you can vote for the right.

It is equally important for center-right parties to depend on people with higher incomes (which generally means more education), because then they will have incentives to advocate lower taxes and less regulation. I tend to oppose such policies, but I would acknowledge–and urge others on the left to accept–that trying to shrink the size of government is compatible with constitutional democracy. People who have reasons to shrink government need a political outlet. Again, the way to oppose their position is to vote for the other side. This debate is a good one.

As long as the parties split the electorate this way, they will have incentives to act reasonably on matters outside their core interests. A pro-business party rooted in the upper stratum of society can easily support civil liberties and a safety net. A left party dependent on working class voters will want to protect economic growth. Both should defend the basic constitutional order.

Unfortunately, this neat arrangement has been scrambled in many developed, democratic countries. Considerable numbers of highly educated people vote left, even forming the base of the center-left parties, while many working-class people have shifted to the right. Democrats now represent the 17 richest congressional districts and most of the richest 50. In the aggregate, Democratic districts are wealthier than Republican ones. (Race is certainly relevant in the USA, and I will say more about that later.)

Mark Muro and Jacob Whiton, Brookings

This situation is dangerous because of the incentives it creates. A center-left party that relies on highly educated people will want to preserve the society’s most advantaged institutions: its most dynamic industries, thriving communities, and elite universities. Since it’s on the left, it won’t explicitly defend inequality, but it won’t really undermine it, either. It will prefer symbolic gestures of inclusion and equity that don’t shake the social foundations. Basically, advantaged individuals will assume that they can retain their own nice neighborhoods, good schools, and satisfying jobs while allowing some newcomers to join them. If such voters represent the main force on the left, social transformation becomes impossible.

Nevertheless, the center-left party will offer the least-bad option for people of color, since diversity and inclusion are better than outright exclusion. Thus Biden drew 70% of voters of color along with a majority of college-educated white voters.

National Exit Polls 2020 (CNN)

For their part, right parties that are based in working-class, low-income communities will have incentives to turn ethno-nationalist, xenophobic, and authoritarian. Being on the right, they cannot embrace social democracy. They could offer libertarian alternatives: getting the state off people’s backs. Unlike authoritarianism, libertarianism is compatible with constitutional democracy. However, surveys never show much support for truly libertarian policies–and less so today, after the neoliberal revolution has played out. Ethno-nationalism has much wider support.

When the parties invert in this way, the left tends to become moderate–excessively so, in my view–but it also generates a critical flank. Right now, the Democrats’ critical flank is led by younger politicians of color who represent urban communities with many lower-income voters of color. They have incentives, as well as genuine commitments, that anchor them on the left. But they are outnumbered within their own party by politicians who represent and reflect high-income communities. If we had a multi-party system, these factions would split and then negotiate about whether to form a coalition in Congress. In our duopoly, the strife occurs within the party and is constrained by difficult calculations.

Meanwhile, the Republicans have strong and palpable incentives to move in a racist and authoritarian direction, jettisoning their libertarian impulses. Debate is less evident on their side of the aisle, since Trump supporters truly dominate the GOP’s elected ranks. Only a significant electoral defeat can re-empower the traditional conservatives, and that seems unlikely.

A similar inversion has been evident in several other countries, including Germany, where the Social Democrats (SPD) now attract highly educated knowledge-workers, while many blue-collar workers have moved right. (I graphed some historical trends here.) One election does not make a trend, but the results from the recent German election are somewhat encouraging. The SPD performed best among people with lower education: the working class. That is how a social-democratic party should perform. The Greens drew almost entirely from the top educational stratum. A red/green coalition would combine working class voters with the liberal intelligentsia, but with the working class in control because of their larger numbers. That coalition would resemble the Democrats if the Progressive Caucus were three times as big.

From DW.com

On the other hand, the hard right (AfD) is disproportionately working class, as is the center right (CDU). Although I do not expect the CDU and AfD to form a coalition in the near future, the temptation is real.

It will not be easy to get out of this situation. The Democrats could offer more tangible benefits to working class people of all races and ethnicities. One problem: policies that I would regard as beneficial are not always seen as such, for a variety of reasons. Besides, there is always a loose connection between policy and public opinion, given the genuine difficulty of discerning the effects of policies plus the low level of attention that most people give to public affairs.

To make matters even harder, Democrats are a loose group of entrepreneurial politicians who have their own constituencies–disproportionately wealthy ones. This means that Democratic leaders are not the best group to reach out to working-class voters, nor are their core supporters likely to support really bold policies. That is why I have been interested in tactics like investing in the Appalachian cities, whose mayors are Democrats.

See also: what does the European Green surge mean?; and why the white working class must organize