Full Employment as the New Progressive Paradigm

By Dan Kervick

Part Two of a four-part essay

In Part One of this essay, I evoked the dismal state of the progressive movement in the developed world, and proposed that as part of the effort to turn this situation around progressives should embrace the political ideal of a full employment economy, with an activist government permanently standing ready to provide a productive job for every person who is both willing and able to work, but who is unable to find work in the private sector.

I would hope people of every political stripe would see value in a full employment economy.  But my argument here is aimed at progressives specifically.  I want to explain why, given the kinds of defining values they have traditionally embraced – democracy, equality, solidarity and progress – progressives should be drawn to the full employment ideal.  I will first explain why, in my view, progressives should view the pursuit of a full employment economy as a political, economic and moral imperative, and embrace the full employment cause as a foundation for progressive political revival.  I will then set out a few basic proposals about how a full employment economy might be structured.

The division of my argument into political, economic and moral components is ultimately a bit artificial.  Economic values are realized within political systems, and political and economic values have moral sources.   And a political tactic is only justified to the extent that the tactic is part of a larger strategy aimed at achieving morally weighty goals.  But breaking the case for full employment down into three types of argument will be a convenient way of organizing our thinking.  In this part of the essay, I will discuss the political dimension of the case for the full employment economy.

1. The Political Arguments

For over four decades, progressives have seen a gradual unwinding of the old social and political framework that defined much of the New Deal coalition and helped define the postwar era.  An older ethos of team spirit, equality, government activism, sober regulation of the private sector and common advancement toward mutual economic goals has given way to trends in the direction of radical individualism, privatization, deregulation, and unchained avarice.  The newer approach has been characterized by an enthusiastic embrace of markets and a fierce opposition to any form of public direction of the country’s economic destiny through government.  The economic role of government is seen under this paradigm, at most, to consist in the provision of some occasional countercyclical stimulus and the maintenance of a so-called “safety net” for those who fail to thrive in the private sector.

The trend has been labeled “neoliberalism” due to its affinities with the generally laissez faire outlook of the classical liberalism of the 19^th century.  Ronald Reagan and Margaret Thatcher are the two political patron saints of neoliberalism, but neoliberalism has been pursued since the late seventies under each administration and both major parties in the United States, and its general outlook and code of economic conduct continue to guide the current administration.   I said that neoliberalism accepts at most a role for government in the areas of safety nets and stimulus because even that limited role is accepted only by the center left version of neoliberalism.   A more doctrinaire and fundamentalist strain of neoliberalism on the right is tirelessly at work to advance the market creed yet further and eliminate any last vestige of an organized public role in our economic life beyond upholding the laws protecting private property.

Neoliberalism is a failure, although as is often the case the political elites who are stakeholders in the prevailing order, and who stand guard over it, will be the last to get the message.  Not every liberalizing economic reform should be decried, but the systemic failure of the overall approach should now be apparent to most of us.   Four decades of neoliberal transformation of the economy have delivered us into a society that is more insecure, unequal, brutal, uncivil and degrading.  That society is now mired in economic stagnation and paralyzed by systemic political failure.

The plutocrats who are the chief beneficiaries of the neoliberal revolution have successfully exploited divisions among ordinary Americas to pursue a divide and conquer strategy that routinely defuses threats to their power.  These divisions exist along many dimensions: cultural, ethnic, religious and class.  But among the most important of these divisions are the growing antagonisms between groups of people who are equally struggling, but who struggle in different ways and with different relationships to government.  Working people in the employed middle class and among the working poor are constantly pitted against people who are not working and who receive various forms of more extensive public assistance.  We saw the divisions between these two groups of Americans express themselves in unprecedentedly frank and increasingly ugly terms during the recent election.

People working longer hours under increasingly degrading and powerless conditions, and who are receiving shrinking pieces of the economic pie for their troubles, easily come to resent those who are seen as dependent on some form social assistance.  These resentments breed a toxic and disempowering political dynamic.  The serf who is doing backbreaking work for small wages to provide unparalleled prosperity to the lord who owns the fields grows bitter toward the serf in the next furrow whom he perceives to be doing less work.   As a consequence of that bitter resentment, he is unable to work with the other person on a common agenda of reducing the economic and political power of the lord, and achieving a more equal distribution of the output of the manor.  This, then, is the first political argument for a renewed progressive embrace of full employment.  Moving to a full employment society would help to restore social solidarity and a sense of common interest among poor, working class and other middle class Americans.  It would alleviate and ultimately erase many divisions between groups of people who desperately need to be working together to achieve a better life.

This line of thinking leads naturally into a second political argument for the full employment economy.  The contrary of a full employment economy is an economy in which people who are willing and able to work are denied the opportunity for meaningful employment.   Such people are not just unemployed – they are disemployed.   A society that practices a deliberate policy of failing to create sufficient work opportunities for all willing workers maintains a disempolyment economy.   In a disemployment economy the bargaining power of all workers is undermined, and the power of employers and owners is maximized.   Every employed person lives in fear that they can be cast into the abyss of joblessness and abject dependency whenever their employer decides to dispose of them.  Once there, and finding themselves competing with a large army of other disemployed workers for a very limited number of open positions, they may struggle to find a new job.  And as for those fortunate enough to have retained their jobs, unless they are one of the fortunate few who possess extraordinary talents, their ability to bargain for a greater share of their company’s revenue has been all but eliminated.   They have no bargaining power because they can always be easily replaced.

The disemployment system characterizing modern neoliberal economies is thus, unsurprisingly, the occasion of a growing income gap, as the fortunate few exploit the powerless of the many to drive ever larger percentages of the society’s output into the asset stores of the privileged.   It is no surprise, then, that the neoliberal politicians who are employed by the plutocracy are committed to the preservation of mass involuntary unemployment, whether in its harsher or softer “safety net” versions.  The plutocracy prefers to pay people a subsistence pittance not to work rather than empower them with work, solidarity and bargaining power, and so they support the continuation of a disempolyment society.  In a full employment society, on the other hand, the power of working people of all types will be greater.  Businesses will have to compete for scarce workers by paying them well.  The resources to do that while remaining profitable will have to come out of top executive salaries and owner profits.  So addressing inequality must begin by building up the social and economic power of those currently near the bottom ranks of society.   We can make progress in that work by eliminating the plutocratic tool of routine mass disemployment.

So a full employment economy is part of the path to greater economic equality.   And this leads us to an additional political argument for a progressive embrace of full employment, an argument that is grounded in the abiding progressive commitment to political democracy.   It must be recognized that a vibrant democracy cannot be sustained under conditions of gross and persisting inequality.  Differences in economic power always translate, under all systems and at all times, into differences in political power.   Ostensibly democratic institutions under persistent plutocratic domination degrade into a parody of genuine democracy, and offer little but a ruse to manage the mob through the entertainment values of media-hyped election campaigns with their illusion of genuine empowerment.  The elections under plutocracy offer only a choice among politicians who all work for that plutocracy, and who differ only in whether they adhere to the hard or soft version of plutocratic neoliberalism.   Breathing real vitality and political power back into democratic institutions requires a commitment to a more equal society, which in turn can be secured only by a commitment to full employment.

End of Part Two.    Part One is available here.