It is telling that complexity scientist, Peter Turchin, has to go back to the deep socio-political divisions of the nineteenth century to come up with a phrase for our times. ‘Popular immiseration’ doesn’t roll easily off the tongue, but the idea of immiseration has been around since Marx, and it refers to the ‘accumulation of misery’ through impoverishment. Turchin’s prefix, ‘popular’, is to do with the scale on which this is experienced around the globe today.
Popular immiseration is what happens when capitalism is left to do its worst. Economic growth continues but its benefits no longer flow to the common worker. Driven by what Turchin calls ‘the wealth pump’, the lion’s share of the benefits of economic growth goes increasingly to the wealthy. Wages stagnate, jobs disappear, inequality deepens, living standards fall, but profits grow. Without significant countervailing action from the state, he argues, the decline in economic wellbeing leads to a decline in social and biological wellbeing. The shrinking of life expectancies in the US is just one of the warning signs Turchin’s book, End Times, cites in its sweeping account of ‘political disintegration’ on a global scale.
Once, it was different
As a telling counterpoint to this sign of our times, Turchin’s book reminds us of a period in the US when those who had most benefited from the wealth pump decided that they should use that wealth to serve broader interests than their own. At the end of World War II, what he describes as the ruling class in the US accomplished something of a revolution. A pro-social faction within that class persuaded the rest of the wealthy elites, he writes, that they should do what they could to reverse the drive to inequality, in the national interest. They had ‘internalised the values that promoted social cooperation’ and put them to work. How they did this was by accepting higher rates of taxation on their own incomes.
The top tax rates in the US at the end of World War II were set at 94 per cent. This was justified at the time by the national emergency of serving the war effort. But the top rate stayed above 90 percent until 1964. During the two decades following the war, Turchin tells us, ‘the very rich gave away to the government nine-tenths of their income’.
Unthinkable now, of course. Greed is no longer ‘good’, it’s just routine. These days, for many of our corporate leaders, there is no problem that could not be solved by lower taxes for business and the wealthy, and a lid on wages for the rest. As for internalizing the values of social cooperation, forget it. One corporate leader has made the staggering claim that super-profitable businesses (banks, supermarkets, miners) are now the victims of ‘profit-shaming’.
Zombie economics
We might have thought that neoliberalism was more or less over, but that kind of stuff suggests it’s not. Although they should have been killed off by the realities of neoliberalism’s consequences, the zombies of economic theory nevertheless continue to turn up at the gates — undead, partially decomposed, angry, ugly, but full of entitlement.
Try as it might to separate itself from neoliberalism’s grasp, the recent federal budget remained its captive. Key buzzwords for the small-state-low-spend orthodoxy — ‘restraint’, ‘responsibility’, and ‘sustainability’ — were everywhere as the government depicted itself as reluctantly surrendering to the laws of economics.
For the many critics who called this out, however, the keyword was ‘choices’. They were not persuaded that the budget initiatives were driven by the inevitable natural forces implied in the word ‘sustainable’, or by a fiscal incapacity to do more for those they had ignored — such as those on JobSeeker. Rather, these were clear political choices, and zombie economics was their alibi.
The fear of ‘big spending’ among governments remains tribal lore these days. Hence, the word ‘responsible’ being offered up as cover for governments doing almost nothing. It’s been a bipartisan political strategy over much of the last two decades. Even when you admit there is a problem, you do as little about it as possible, and defer even that as far into the future as you can, while pretending you are dealing with it.
Some still insist that this is just what economic theory tells us to do. To intervene significantly in the market would not be ‘sustainable’. God forbid that governments might ‘pick winners’ rather than just commiserating with the losers. Corrective action in the form of government spending would not be ‘responsible’, and so, despite temptations to the contrary, we need to exercise ‘restraint’. In defense of the irresponsible abandonment of government’s duty to care equally for all of its citizens, we still draw on the low tax, low spend, small government, fundamentalism that has depredated so many Western societies since the eighties.
It doesn’t have to be this way. There are plenty of other ‘responsible’ choices that could be made. They aren’t determined by ‘restraint’, however, and they would be perfectly ‘sustainable’ if we chose to make them so.
You wonder how much restraint our current government might exercise if confronted by a powerful business lobby demanding a major national investment in health, or education, or housing, which would be funded by introducing a tax on the super-rich.
That is more or less what happened in post-war America. They could really do with that now, of course — and so could we.
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