Capitalism gone wrong: Too many left behind in our divisive economy

Capitalism gone wrong: Too many left behind in our divisive economy
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Trump’s election finally led to serious discussion about who has been left behind. Capitalism drives failure without tears or concern for the victims. And the public pays the price in the jobs and wages lost. So it’s important to assess what we can offer to those whom capitalism spits out as if they were so much trash. But whether the political system can respond takes us beyond what ought to be done to how.

National employment levels result from macroeconomic policies such as stimulus packages, tax levels and spending for public services from education and health to transportation, and investment in research and infrastructure. National solutions are often efficient. Significantly, national spending, taxing and regulatory policies also spread or concentrate the wealth and property owned and controlled by the 10 percent or the 1 percent.

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Local solutions are at the mercy of national trends and tend to be zero sum games in three ways. To attract industry, if rural Tennessee gets it, upstate New York doesn’t. When Los Angeles got the team, Brooklyn lost it. It’s also zero sum because industries can damage or create expense for others, like greenhouse gasses and bad air in states downwind from burning coal. And it’s zero sum because communities become self-protective class enclaves that are about keeping their wealth.

Some economists think whatever projects yield more than they cost are fine, regardless of those harmed, whether it’s urban renewal in Connecticut or environmental progress in coal country. Economists call it the Kaldor-Hicks standard. But pockets of poverty hurt everybody because of the human potential wasted, the political counterattack, and because such communities too easily become unsafe.

Running roughshod over the lives of some for the benefit of others is also morally questionable if the harms can be mitigated or the wealth can be shared. Even from the perspective of project proponents, outsourcing unmitigated harms generates fierce opposition and less sustainable results. That’s part of the current political backlash that Trump has been riding.

How can we move forward? American federal structure often requires spreading projects around. Proposals for public transit or global trade serve the coasts and major metropolises but generate fierce opposition elsewhere. Environmental projects suggest clear geographic winners, and losers who block important changes. Thus, the Erie Canal was the first major advance in American transportation infrastructure, 42 years after the peace treaty with Great Britain, because New York state needed no one else’s permission.

Our political system sometimes surmounts such conflicts. Our highway system crisscrossed the states. Land grant colleges spawned campuses and benefits throughout the country. Social Security was designed to be universal. Those advances offered broad benefits despite some economic inefficiencies. Democratic politics drive, and should drive, efforts to care for all the people, not just a favored few. That incentive to serve the population at large is the principle way democracies differ from dictatorships.

Especially in a federal system, national projects require compromise. Without compromise, without deliberately creating benefits to share, politics becomes by turns exploitive, incompetent, ineffective and sometimes lethal. Jim Hightower’s 1998 book “There’s Nothing in the Middle of the Road but Yellow Stripes and Dead Armadillos” announced the breakdown of democracy in America, and the decline of our nation’s ability to deal with problems of almost every sort, including the ability to change or eliminate programs that have outlived their usefulness.

The “pork barrel” has been maligned but also helped build coalitions for national projects as senators and representatives used the congressional appropriations process to steer funds for local undertakings. Some of those funds were misused for personal political rather than regional advantage, but the pork reflected play in the system. Eliminating the pork spilled the lubricant.

The capitalist economy aggravates dislocation, and with it, pain, polarization and gridlock. In this country, proposals to mitigate the costs of industrial shifts and unemployment have focused on preparing workers for plant closings by equipping them for jobs in the changing economy. Adverse economic fortunes can be cushioned by a strong safety net and a public educational system which provides people with the resources to move on by moving away.

But the personal cost of moving away from family, friends, support networks, and into unfamiliar regions, are significant. Some communities have reinvented themselves after the loss of major employers. Some European countries have been more aggressive in developing new employment opportunities in the wake of layoffs and plant closings. They provide an alternative to “market knows best” thinking.

If national progress leaves backwaters and local projects are discarded as inefficient, or because the market hasn’t yet spoken, we are left with national zero sum choices and wind up maintaining industries that do national damage for the sake of local workers, leaving workers to fend for themselves, or hollowing out their communities. Democratic politics should drive compromises in less ideological times. It’s easy to impose costs on others, in dollars, health and an unsustainable environment. Ignoring other people’s problems turns America against itself and destroys working people’s opportunities.

Stephen Gottlieb is the Jay and Ruth Caplan distinguished professor at Albany Law School and an expert in constitutional law. He has served on the board of the New York Civil Liberties Union and the New York advisory committee to the U.S. Civil Rights Commission. His latest book is “Unfit for Democracy: The Roberts Court and The Breakdown of American Politics.”