Seeing the System
"What's the difference between a radical and a liberal?" It is a question I'm regularly asked at lectures, usually by college students struggling with their own sense of the world, trying desperately to figure out where they stand on the seemingly endless spectrum from right to left. Often it is put to me by College Democrat types: folks who are frustrated by their party's lack of commitment to social and economic justice, but who can't quite bring themselves to break with the group they consider the only alternative to the far right.
Usually, I answer the question in the fairly predictable way: by explaining that at the most basic level, the difference between radicals and liberals is one of focus, and where one places the crux of the blame for our current predicament, whatever that predicament might be. In terms of economics, liberals tend to believe that the larger system of which we are a part is basically just, and that injustices and negative goings-on within that system are mere unintended consequences of an otherwise well-oiled and beneficent machine: a little tinkering here, a little reform there, perhaps a little more money for those at the bottom, and everything will basically be O.K.
On the other hand, the radical believes that the system itself is the problem: in terms of economics this means that the system of profit does not create hardship as the unfortunate sidelight of an otherwise warm-and-fuzzy social order; rather, we believe that the pain experienced by people under such a system is very much inherent to that system, and is in fact required by it in order to function. People are out of work in such a system, and thus poor and even destitute, not because the system is breaking down; but indeed, because it is working exactly as intended.
Now at first, this is an analysis that most don't want to accept. And that's no surprise, as "seeing the system" goes against everything most of us have been taught since we were young: the idea that one can be whatever one wants if one simply tries hard enough and plays by the rules. The notion of the U.S. as a pure meritocracy where individual failings are just that -- individual -- is a very seductive ideological posture, and one that few have ever subjected to real challenge.
The good thing for those of us who are radicals however, is that every now and then we get a little help in proving the larger point from the most unlikely of sources, and this week was no exception. For as I write this, Americans have just been told that we must brace for a ratcheting up of interest rates: three times in one day as we enter May, and another likely hike in the middle of the month. And why? Well, as Federal Reserve Chair Alan Greenspan explains, the economy is too healthy, unemployment has fallen too low, and wages -- God forbid -- have started to inch upward for too many, thereby raising the specter of dreaded price hikes. As such, it has now become necessary according to the worldview of the Fed -- one that is shared by all major players in both the Democratic and Republican parties and certainly by their Presidential candidates -- to raise the cost of borrowing money, thereby cooling off the expansion and hiring spree, and perhaps even nudging unemployment numbers back up a bit.
But wait: what was that? Intentionally slowing down job and wage growth? Intentionally doing something to push unemployment up -- and thus, put folks out of work? Exactly right, and thus, it is Alan Greenspan who has demonstrated this week the accuracy of radical analysis as to the nature of the economy under which we labor and live. This former devotee of the market-worshipping, pseudo-intellectual cultist, Ayn Rand, now demonstrating clearly that pain and suffering, low wages and poverty are not the result of individual moral failings or a decline in the Protestant work ethic, but rather, are built-in to the nature of modern capitalism.
The fact that wages for most workers are still at lower real dollar values than they were in the late 1970's, or that most of the wage gains have been at the top of the employment structure and that over 40 million working people still lack health insurance is of no consequence: according to Greenspan, things are too good for too many people, and now it is time to tighten our monetary belt. But what does it all mean, outside the confines of economists' models and reserve bank meeting rooms?
Well consider this: when the Labor Department says the unemployment rate is 3.9 percent -- the current official rate and a 30-year low -- this is hardly an accurate depiction of the joblessness picture in the U.S. After all, the official unemployment rate doesn't include those who have grown so discouraged by their job prospects that they've stopped looking for work; nor does it include the many who can only find seasonal work and so they don't actively seek employment for much of the year; nor does it count those persons who are able to pull down only a handful of hours -- perhaps temping -- and instead counts these as if they were every bit as employed as the full-time salaried employee. If these persons were counted in an official unemployment/underemployment rate, the number of such folks would at least double, coming in at around 8 percent, or perhaps even as high as 10 percent. That the Labor Department does in fact keep this number -- called the U-7 rate but never reported to the general population -- is only further confirmation that the propaganda system in this land requires intentional obfuscation of the true state of economic affairs.
And so it is essentially a matter of official monetary policy to maintain unemployment at around 8-10 percent of the potential workforce -- between 9-11 million people in all -- so as to keep the economy from "overheating," which really means to keep wages from rising too high, thereby forcing companies to either raise prices or suffer a loss of profitability as workers pocket more of the value produced by their output. If we assume that many of these 9-11 million unemployed and underemployed persons have dependents, and that lacking steady income they likely also lack bankable wealth-producing reserves to call on in hard times, it is fair to estimate that over 20 million Americans are stuck in the ranks of the poor and near-poor thanks to the conscious decisions of economic elites to keep them there.
The doors that this simple and readily apparent fact of American life has the power to open are substantial: after all, if people are out of work and poor (and thus, often in need of public assistance) because of a deliberate economic policy; and if, according to this theory, the destitution of these individuals is something which is required so that the rest of us may enjoy lower prices by maintaining a certain degree of slackness in labor markets, then not only should we not disparage the poor for their poverty, but indeed, we should perhaps consider them among our most noble citizens: sacrificing their own good for the well-being of us all. Certificates of good citizenship for the homeless should be just around the corner, if we are to accept the dominant monetary logic; Congressional medals of honor, perhaps, for all the minimum wage workers who, by their limited and shrinking purchasing power help keep the price of milk and software low for everyone else!
To witness what the Fed is doing this summer to interest rates -- all because workers are supposedly doing too well -- is to witness perhaps one of the central organizing issues of the new decade: simply put, that working people are hurting and will continue to hurt in this system so long as the interests of the owning class are put ahead of those of everyone else.
As long as jobs and wages are seen as zero-sum games -- and profit maximization seen as the ultimate goal of national economic policy -- working people will continue to be played off against one another, rotating in and out of financial instability. To highlight the structural nature of economic hardship -- and the Fed's actions make this much easier for radicals to do effectively -- is to provide a new way of discussing so many of our most vexing political and social issues. It is to allow citizens to potentially rethink their stereotypical and negative views about the poor, about people of color (blamed for "taking" jobs from whites), and the real sources of whatever pain and insecurity they may be experiencing in their lives. It is to launch a frontal assault against the myth of meritocracy and the "magic" of the marketplace, and it is to make clear the overlapping worldviews of the two dominant political parties in America: a clarity that will be desperately needed if we are ever to build an effective alternative to the status quo.
So this week, let those of us who are radicals do something we probably never expected to find ourselves doing: thanking Alan Greenspan for making the nature of our economic beast more apparent than any army of sociologists could ever hope to do. And let us go forward, using the facts pulled from the very headlines of the mainstream press, as we strive to make the public "see the system" for what it is, so they may join in an effort to replace it.