The always interesting and often brilliant Walter Russell Mead has a post titled The Right Wrestles with the Inequality Debate. It is mainly an analysis of the disparate views within the political right about income equality. First, he correctly notes that people on the conservative and libertarian side generally don’t object to inequality, to the extent it is earned by people who create value.
by giving free rein to the talents and ambitions of the strongest, we are setting in motion a process which over the long run will make everyone better off. The talented will invent new technologies, discover new drugs, make compelling art and otherwise enhance the general human storehouse through their own unfettered pursuit of happiness. Any heavy handed government efforts to keep the talented from becoming too successful will slow down the pace of innovation and change that historically has seen living standards for average people skyrocket over the last three hundred years. This idea isn’t going away anytime soon and the reality that three hundred years of capitalist development has in fact raised living standards to unprecedented levels in much of the world suggests that there may even be some truth in it.
Mead does not focus on the question of resentment against unearned wealth. Where political connections are the source of wealth, that wealth does not benefit the public or create value. It is zero sum, parasitic.
Mead devotes most of the piece to a historical discussion of the cultural divide among white voters in the American South, between an oligarchical elite and a populist majority that did not object to Federal spending for its own benefit, such as benefits to farmers to prop up rural incomes, and as rural electrification. Mead sees this cleavage echoed in the current conflict between the populist Tea Party and the GOP establishment. He sees ambitious GOP politicians trying to create a master narrative that will lead to party unity and political victory. Mead notes that the liberal narrative on this point “sees the ancient path of righteousness as the trail blazed by FDR and the New Deal.”
As we noted in America 3.0:
Very roughly, the aspirations on the Left are a revived 2.0 model with government, unions, and corporations restored to solvency, providing a secure life for the general population through stable employment mediated by regulation and union borrowing power, generating a cash flow through taxes and union dues automatically deducted from regular paychecks. It is more or less an idealized version of the US economic structure of the 1950s with Progressive personal values and family relations.
Mead then notes “the conservative narratives look farther back: to the economic and social ideals of pre-New Deal America.” This is correct. American conservatives often hark back to an idealized vision of an older America, which we call America 1.0. Mead refers to this as “a right pining for the 1890s.” But I don’t believe this is correct. It is much more vague, idealized and incapable of being pinned down. The conservative nostalgia sometimes focuses on the Founding era, sometimes on the frontier. However, sometimes the nostalgia is for fairly recent times, postwar America, when times were better for new business formation and smaller businesses. Still, Mead is right about the large element of nostalgia.
Mead describes the two version of the Conservative “inequality story” as tales of a fall from grace. One is an “economic jeremiad”:
America once lived by the true faith, the economic conservatives argue, but we have turned aside. We have embraced the hell-spawned alliance of a large corporate establishment and a powerful central government. We have deserted the shrine of true liberal economics to worship the false idol of crony capitalism. Rent seekers have driven true entrepreneurs out of the temple; corrupt elites in politics and corporate life swap favors and powerful interests have captured the mechanisms of the regulatory state to buttress the power of the rich and well established.
The other is focused on social and religious issues:
In this vision, our economic troubles and especially inequality result less from errors in economic policy making than from a national moral collapse. Social conservatives tend to see a series of threatening social changes that are eroding the institutions and beliefs that have made America work. A culture that looks on human sexuality as a recreational pursuit rather than an encounter with transcendence inseparable from monogamous marriage and childbearing has, for many social conservatives, lost touch with the values that any society needs to stay healthy and prosperous long term. The decline of the two parent family, the rise of a culture of instant gratification, the pornography explosion, the acceptance of homosexuality: for many Americans, these developments are the harbingers of the decline of our political and economic life. Unless Americans return to the spiritual and personal values that marked our society in earlier times, we face inexorable decline – our society will become less just, less free, less equal, less honest, less safe and less rich.
Mead suggests these can be “”blended into a kind of unified field theory of conservative populism”:
Traditionally, one can argue, the United States was guided by a culture that combined the love of small government, free markets, religious faith and strong family values. That culture is under assault today, and as it loses its power, we face an ever growing sea of troubles. Weak family values lead to children growing up without the ability to build strong families themselves or earn good livings. More and more children grow up in economically and socially insecure single parent households. This in turn creates a culture of dependency; people are willing to cede more power to the state in return for more handouts. The bloated state becomes increasingly dysfunctional, imposing higher taxes and regulatory costs on an increasingly sluggish economy. Greedy rent seekers flock to Washington, diverting ever larger masses of wealth into their own hands and further distorting economic processes. The Hollywood and Wall Street elites, amoral to the core, reap ever greater rewards as in their different ways they continue to undermine the foundations of American social stability and economic prosperity.
This version of the story, however, is anathema to the GOP old-timers: “There are lots of establishment Republicans (and Democrats) who are quite happy with a Washington culture of back scratching and favor-swapping. Many of the Tea Party versus establishment battles inside the Republican Party today are about the efforts of insurgents to dismantle a system that the career politicians consider a natural and necessary way of getting the nation’s business done.”
Mead is being too nice here. There is nothing natural or necessary about the degree of corruption which is going on in Washington now, the amount of wealth which is gravitating there, or the degree to which government power has been harnessed to private greed. It has gotten a lot worse in recent years. People who have been there a long time may have gone native and notice anymore. But there is no excuse for that.
Luigi Zingales, in his brilliant book A Capitalism for the People: Recapturing the Lost Genius of American Prosperity notes that the return to investment in lobbying is massive, dwarfing the return on improving goods and services and competing in the marketplace. In a genuinely horrifying passage Zingales notes that the awareness of how much inside dealing is worth has only recently penetrated the awareness of American business, and overcome older habits, values and attitudes which pushed against seeking government favors as a primary way of making a living.
Mead is especially good in his conclusion.
[B]oth left and right populism in America today are nostalgic; they seek to restore old orders rather than to imagine or build something new. This again is characteristic of eras like ours. The transition from late industrial society to an early stage information economy is hugely disruptive and painful. At the moment, it is easier and more natural for many people to worry about what is being lost than to look forward to the new possibilities that technological progress is creating for our future.
At the moment we don’t as a society even have a real vision of what a better, non-nostalgia drenched future might look like, much less a sense of what policies might help us get there faster.
This needs to change.
It is hard to imagine the America which is now coming into existence. It will be different from anything we have ever known, in many ways. It takes a leap of the imagination to think about what it will be like. And it takes a leap of faith to believe it will incorporate the best of what has come before, that it really will be better. It will take effort as well as imagination and faith to reimagine and repurpose what we have done in the past, make it relevant not nostalgic, make it work for us again, but even better, make the emerging technology serve our values, not be our master.
Formulating such a vision, and the necessary policies to make it happen, is what America 3.0 is all about.
Mead’s thinking, in his books, his articles and on his blog, are similar to the ours on many points. He sees the scale of the change now under way. He sees the need for a reformulated politics to address the change. And, unlike most people, he sees that the future can be and should be a great era in America.
We are eager to hear more from Mead about his vision and proposals.