In Praise of Prosperity

By Joshua Holland, AlterNet. Posted April 25, 2005.

Every day, progressives dive headlong into debates over the U.S. economy only to end up angry, defensive, and confused. The problem: few of us realize that the very definition of the terms used in these heated discussions -- for example, "growth" or "competitiveness" -- is loaded against us.

The language of economic competitiveness is not ideologically neutral, but instead designed to promote policies that serve the interests of big corporations and their investors. If progressives want to reframe the debate over America's future, they will have to reframe its very terms. A first step: start talking about prosperity.

When making arguments in support of their favored policies -- be it massive tax cuts or rolling back environmental safeguards -- conservatives focus almost exclusively on economic growth. What most Americans don't understand is that economic growth does not necessarily make us more prosperous as a society.
Consider the research of economists Thomas Piketty and Emmanuel Saez: while we've witnessed several periods of immense growth in recent decades, the average real income of the bottom 90 percent of American taxpayers -- in other words, most of us -- actually fell by 7 percent between 1973 and 2000.

As Americans, we are raised to believe from an early age that growth is an over-arching imperative of a capitalist economy. You don't have to be an economist to get it -- when graphs point upward, the economy's good. So we are expected to dedicate ourselves to that goal, even if it requires ceding our own personal well-being. Just think about the rhetoric surrounding living wage laws: sacrifice your very basic needs for the good of the corporations, i.e. America. We're all Corporate Citizens, and we have to advance the national project of achieving growth at all costs.

But for progressives, this narrative muddies the waters and obscures questions that are important to all Americans. Growth-related statistics, for example, tell us nothing about inequality. If the wages of 99,990 workers were to decline by a half percent while the fortunes of ten members of the Walton family increased by 20 or 30 billion dollars, the average growth for that population of 100,000 would be quite impressive indeed. But that's little solace for anyone who is not a Walton.

The self-serving politics of growth has grown ever more dominant since the emergence of the new conservative movement under Ronald Reagan and Margaret Thatcher, creating a lopsided system that increasingly serves the greed of the few at the expense of the well-being of the many. According to Ed Wolff, author of Top Heavy, the share of national wealth controlled by the top 1 percent of households increased from 20.5 percent in 1979 to 38.5 percent in 1998, while the bottom 40 percent of American households experienced a drop in their share of national net worth, from 0.9 percent in 1983 to only 0.2 percent in 1998.

This alarming trend is only going to get worse in George Bush's "Ownership Society." According to the Los Angeles Times, during 2004 and the first couple of months of 2005, wages didn't keep pace with inflation for the first time since the 1990 recession. In other words, working Americans effectively took an across-the-board pay cut -- and, more importantly, at a time when the economy grew by a healthy four percent, and "corporate profits hit record highs as companies got more productivity out of workers while keeping pay raises down."

According to ILO statistics (from 2001), Americans are the most productive workers in the world -- a fact that is often touted by the 'boot-straps' folk on the right as proof of our system's superiority. But we're not the most productive workers per hour; we merely work more hours than any other industrialized country, and our hours increase almost every year. It's the kind of productivity that is built primarily on the backs of the middle class and the poor. Squeezing every last drop of productivity out of working people to maximize growth is the essence of the Wal-Mart model. It's good for the economy, but not for the people who live within it.

The Prosperous Nation

In order to challenge this growth-obsessed narrative, progressives have to do more than point to facts and figures, however damning they might be. They must reframe the debate in terms of prosperity. Prosperity is less concerned about the GDP or per capita income, but the quality of life afforded by a given economy. Within such a discourse, economic growth is still important, not as an end in itself but as a means to achieve true prosperity.

Discussing the economy in terms of a prosperous society opens up the debate to a more inclusive and accurate picture of what Americans want. If our goal were to be the most prosperous nation, we'd be forced to grapple with the fact that the United States ranks the highest among the highly developed countries in each of the seven measures of inequality the index tracks. While we enjoy the second highest GDP in the world (excluding tiny Luxembourg), we rank dead last among the 20 most developed countries in fighting poverty and we're off the chart in terms of the number of Americans living on half of the median income or less.

Among industrialized nations, the United States is at the bottom in functional literacy, even as only about a quarter of Americans graduate from college. Despite spending twice as much per capita on healthcare as most developed countries, only Ireland and Denmark have lower life expectancies. We're number one in the percentage of population without access to healthcare. One of eight Americans don't survive to reach age 60, which leaves us at the bottom of the pile in terms of life expectancy in the developed world.

We're overworked, underpaid, and with little or no financial security. No wonder that the National Institutes of Mental Health found that in any given year, 10 percent of Americans suffer from depression and over 13 percent from some type of anxiety disorder.

We may be rich as hell as a nation, but a great many of us are struggling just to keep it together. A truly prosperous country, on the other hand, ensures the greatest benefits to the greatest number of people.

Prosperity is Competitive

Here's the kicker: a prosperous society is also an economically competitive society. Contrary to what the Bush administration may claim, giving Americans a decent shot at the good life is not incompatible with building a strong economy. The world leader in per capita GDP is Norway, a nation that offers its citizens long vacations, generous paternity leave programs, strict environmental regulations and well-developed social safety net.

According to rankings put out by the World Economic Forum -- an industry group of big multinationals -- the most competitive economy in the world is a social democracy: Finland. So are seven of the 10 most competitive economies in the Forum's Global Competitiveness Index. And seven of the 10 most 'economically free' countries in the Economic Freedom Index -- which is published annually by the uber-conservative Heritage Foundation and the Wall Street Journal -- are social democracies. The Fraser Foundation -- a Canadian version of Heritage -- publishes a similar index and, lo and behold, seven of its 10 most competitive economies are also social democracies.

The next time some right-winger claims social benefits reward laziness and inertia, remember to point to Bernard Wasow's research. The economist with the Century Foundation found that between 1970 and 2000, per capita GDP increased by 64 percent in the United States and 60 percent in France: "In America, [however,] this came about because productivity per worker rose by 38 percent and hours worked per worker rose by 26 percent. In France, it came about because productivity rose by 83 percent while hours worked fell by 23 percent."

Fighting Right-wing Rhetoric

The best antidote to the right's post Cold-War triumphalism is an economic debate that centers not on growth but prosperity. The defeat of Communism was, for many, a vindication not of capitalism generally, but of a Darwinian concept of capitalism following Milton Friedman's model. Today, maintaining economic growth and competitiveness has become conflated with an entire gamut of pro-rich policies: privatization, deregulation, keeping taxes at a level that squeezes government, maintaining low wages and "labor flexibility," and not being too strict about those pesky issues of corporate accountability.

In reality, economic competitiveness is as much a question of technological savvy; the availability of capital; a strong rule of law; a healthy and educated workforce; extensive infrastructure and a good location on global trade routes. In other words, a competitive economy requires greater investment in the public sphere, not less -- especially in education, high-tech R & D and infrastructure /www.alternet.org/story/21400/>.

Conservatives love to make any argument about the effects of their policies into a false debate between capitalism and socialism -- with liberals cast in the role of bona fide pinkos. This is just not true. A progressive vision for America embraces the free market, but also recognizes the need to curb the worst excesses of the system. Capitalism is a lot like Winston Churchill's view of democracy: it's the worst possible arrangement, except for all the others.

Many Americans are tired, stressed out, depressed, hooked on drugs, relatively poorly educated and with few opportunities for a better life. They are ready to hear something new, something other than the usual scare-tactics of the right. Progressives can win the current economic debate by making one simple point: A truly prosperous country ensures the greatest benefits to the greatest number of people.

Joshua Holland is a fair-trade activist, a student of international relations at the University of Southern California and editor-in-chief of the Trojan Horse, USC's lefty muckraker.

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