Yet the potential for long-term transformation embedded in this political moment — and, more broadly, the degree to which Biden and Democrats can throw economic conservatism on the defensive — might be a whole lot larger than that.
Biden’s bill represents a decisive break with austerity politics and a move toward a vision of far more robust government intervention in the economy, with an eye toward lifting the poor and middle class alike as part of the same fundamental mission.
But by itself, this won’t be nearly enough to achieve the FDR-style presidency Biden has promised. And a lot can still go wrong.
An excellent new book by progressive economist Mike Konczal provides a useful way for understanding the promise of this moment — and how easily we can fall far short of that promise.
One of the big arguments in the book, “Freedom From The Market,” is that government and public policy have — all throughout our history — created new foundations for greater economic opportunity and better life prospects.
We normally ascribe those things to the workings of “free markets." But in reality, the state has repeatedly structured those possibilities, transforming economies that failed to deliver on them into ones that did so better.
The Homestead Act gave land to many Americans, providing a floor of opportunity after the Civil War. The eight-hour-day movement — and maximum-hours laws — ultimately allowed workers better and more dignified lives amid industrial domination and drudgery.
Social insurance enacted during the New Deal protected people from getting thrown into severe deprivation by boom-and-bust cycles and/or old age. The Great Society built in more protections through expansions of the welfare state.
Konczal’s book argues that we need to recapture this ambition. The rescue bill — which will be followed by another major “Build Back Better” effort on the economy, infrastructure and climate — suggests a real shift in this direction.
I talked to Konczal about the transformative potential in this moment, and why it could still fall far short. An edited and condensed version of our conversation follows.
Greg Sargent: You describe the Great Depression as a “shattering event” that, by revealing state governments and civil society as woefully incapable of supplying baseline economic security, ultimately led to the New Deal and the federal government’s transformation of the economy.
How did the coronavirus have that sort of similarly shattering impact?
Mike Konczal: It ripped away a few illusions of the economic ideology of the last couple of decades. One is we saw how essential workers are so important for making sure the economy runs, yet are so vulnerable, working long, unstable hours for low pay in dangerous conditions. That was amplified by the pandemic.
Two is the actual infrastructure that goes into care work and taking care of children — the notion that this work is incredibly valuable but not compensated very well. That helped accelerate the argument for a child benefit.
Third is the idea of industrial policy — the idea that the government should set out to secure certain resources and deploy them in a concentrated way. We’re now seeing the government really step up and move a remarkable number of vaccinations. That’s a good sign for the notion that the government does have a really important role to play in the economy.
Sargent: The relief bill treats poor and middle-class people as being on the same spectrum: Rather than isolating poor people as a class with “special problems,” features like the child allowance raise the income floor and purchasing power for just about everyone, with the aim of alleviating inequality and juicing economic growth.
This seems new only relative to the neoliberalism of the last few decades. With many examples you discuss in the book — either policies that did happen or reform goals that went unfulfilled — the social movements behind those efforts were also animated by similar insights.
Konczal: Absolutely. During the 19th century, people were trying to figure out how to bring workers together. Artisans worried about protecting their craft, larger-scale industrial workers wanted better working conditions. How do you get their interests to all align?
One thing that really worked well was limiting the number of working hours, which could bring higher- and lower-wage workers together. The eight-hour workday really did do that.
The big example that’s relevant here is World War II day care. As opposed to earlier, charity-based day cares, the military made the wartime ones available to any mother who worked in defense production.
Thousands of women fought around the country to keep them going after World War II. They were up against strong opposition and failed. But it really did show how a universal program can create a coalition that will come to defend it.
The child allowance — by not just saying that something’s wrong with poor people and we have to help them specifically, and instead saying that everyone raising children all deserve it — will give this a much different feel than means-tested and stigmatized programs.
Sargent: We need to see the child allowance made permanent, which would create a guaranteed income of sorts. We also need a federal $15 minimum wage, a public health insurance option at a minimum, reforms protecting workers’ organizing and boosting bargaining power, paid leave and expanded child care.
How do we get from here to real long-term transformation?
Konczal: We need to weaken the filibuster in the Senate. Really essential reforms to our democracy and voting rights, investments in climate, taking care of our elderly and vulnerable — a lot of our important priorities are going to run up against this totally arbitrary wall.
Sargent: When would we be able to say, “We’re really seeing transformation here"?
Konczal: One is the recovery. If we can get to 3.5 percent unemployment by the end of next year, that will change the way we think about recession-fighting and economic security.
Two is that some of these programs become long-term. There’s still an instinct among many that we don’t want these programs to be too easy or generous because they’re associated with poverty. With the child allowance, we’re not doing that anymore. We’re going to take care of children in poverty like every other industrialized country.
Then the big things are empowering labor, dealing with climate, and dealing with the crisis in care work — the weak investments we do in our care infrastructure, which we saw with the care of children last year.
Sargent: Much more robust public expenditures — along the lines of the transformation you’re describing — could also counter reactionary nationalist appeals. You write that those appeals are both racial/ethnic and economic: They offer protection from markets, but under the guise of illusory protections from immigrants, global trade and elites that are supposedly culturally hegemonic.
Konczal: We can all say the central idea of neoliberalism — about getting the government out of the way — is false. But the book points to a positive project: I propose securing freedom through the removal of market dependency from spheres of our lives.
When you read the national greatness conservatives, their diagnosis of what went wrong isn’t sufficient to the moment. They believe the main driver of weak wages is immigration. The decline in the value of the minimum wage is orders of magnitude larger.
At the end of the day, if you’re not actually challenging market dependency, you’re not making people more free.
Sargent: I’ve been developing a theory that if Biden and Democrats can succeed — and continue going big along the lines we’ve discussed — that it could clear political space for making our immigration system more humane and increasing legal immigration, and for much more robust action on climate change.
This would represent a kind of new synthesis — a fundamental shift toward both a much more progressive approach to the economy and more bold action on issues Democrats traditionally see as risky (immigration, climate) because they’re easily demagogued by right-wing populists.
Konczal: It’s definitely the case that the Democratic Party is taking questions about the economy seriously in a way they haven’t for a generation. There will be a lot of false starts and retrenchment. But the trend is definitely much more bold and aggressive, and that’s very positive.
If you can get unemployment very low and deliver things that make people more economically secure — which means they feel more free — then I think it allows you to gain support on other things. But also it’s the right thing to do — eliminating mass suffering that doesn’t need to happen.