Friday, 20 April 2012

Review of Thomas Frank's Pity the Billionaire, Part Deux

For a book about the intellectual contortions of conservatism, there is a strange and incongruous presence haunting the pages of Pity the Billionaire – Marxism.

There is the “reverse Marxism” of the Tea Party and Glenn Beck which regards bond traders as the silent majority and those who try to regulate markets as elitists.

There is the new fandom for Ayn Rand’s “Marxism of the master class” with its solidarity for billionaires and contempt for the exploiting masses.

There is the new conservative obsession with the “ruling class”, the intellectuals who control the government and hand out bail outs to big business, and who look down their very long noses at virtually everyone else, the long-suffering “country class”.

“There is no escape from the conflict between the classes,” writes a retired professor of international relations in the conservative journal, The American Spectator.

“It was a strangely bolshie line for a conservative hero,” muses Frank, “weirdly akin to Marx’s dictum that ‘the history of all hitherto existing society is the history of class struggles.’”

Here is Frank speaking again: 

Conservatives, says Cory Robin in The Reactionary Mind, are often “the Left’s best students”. They have known for two centuries that in order to defeat a revolution you have to become like the revolutionaries themselves. But the revolution was defeated decades ago. Now you have to invent enemies.

One could invoke Freud’s return of the repressed to explain this curious phenomenon, the insight that the effort to banish basic aspects of your psyche never works, they are always come back, although not in the original form.

The right stuff

But psychoanalysis aside, one thought does arise in response to this constant inversion, although not one pursued by Frank. That possibly, heaven forbid, the proper riposte to “reverse Marxism” is actual Marxism.

Not the political, gulag-filling Marxist constructions of Lenin, Trotsky and Mao or “cultural Marxism” whatever that is, but the unadulterated economic thought of Marx. When you are employed you are exploited, your work creates surplus value and that surplus enables profit to be made and capital – money invested to make more money – to be accumulated. The basic working arrangement, said Marx, is a smokescreen that is presented as a freely negotiated contract but is, in reality, a form of theft. Employees are portrayed as free and independent but, in reality, they are “wage slaves”

But while the mirror-image Marxism of the Right makes hay, poisonous hay, the real stuff is an ideology that dare not speak its name. Of the dissonance between the conceptions of conservatism and the reality of the way the world works, Frank writes, “Essence was in such violent disagreement with appearance that the force of it seemed likely to snap one’s neck”.

This is an oblique reference to Marx. His philosophy was an attempt to make essence – if you work you are exploited – coincide with appearance – everyone is free and employment is a natural exchange because it is “bilaterally voluntary” in Milton Friedman’s words.

But now appearance is in such conflict with essence that it is powerful enough, in Frank’s words, “to snap one’s neck”.

"In all ideology men and their circumstances appear upside down as in a camera obscura," Marx said in The German Ideology in 1845.

To the political class in Britain and US thinking the right way up is like speaking a foreign, or rather forbidden, language. Which goes a long way to explaining why, in “hard times,” the Right is predominant. You might not like it, they say, but only the one per cent has the power to create jobs and wealth and the money for public services. So you’d better keep them happy. The last thing we need, says the UK government’s chief tormentor of the sick, Chris Grayling, is “swinging taxes on wealth creators”.

This, to call it by its real name, is a form of blackmail. “One reason the Right fastened on the “job creator” line so avidly,” says Frank, “is because it allowed them to flip the script of the hard-time scenario. When people were out of work, they insisted, the important thing was not stimulus packages or public works or social insurance: it was giving small-biz trade associations every last item on their legislative wish list. The nation’s job creators had to know they were loved. Their confidence had to be carefully built up; their biases had to be catered for: their every caprice had to be enshrined in state policy.”

Government cannot create jobs, the Right says, “only business can”. This has become the common sense of this strange age, despite its gross historical illiteracy. There is a note in Frank’s book of the GDP growth achieved in the US during Roosevelt’s New Deal, a time when the government directly employed 11 million people because the private sector “couldn’t or wouldn’t” on public works, conservation and cultural projects. The figures are 11 per cent in 1934, 9 per cent in 1935 and 13 per cent in 1936 (page 132). Slightly higher than the anaemic growth achieved now we have accepted the obvious lesson that only business can create jobs.

The absence of a Left has given the Right a free pass on the seminal issue of who really creates wealth and jobs. The “left of centre” is morally outraged by growing inequality and £20 million salaries for CEOs, but it can’t take the obvious next step. People are literally being ripped off. They give their employers something, not the other way round. The wealth, and ensuing power, they create are appropriated by small elites.

A breath of intellectual fresh air

When someone breaks through this self-imposed intellectual barrier, the effect is like opening all the windows in an airless and suffocating house. “We have to smash this prejudice that the rich are useful just because they are rich,” says the French Presidential, Front de Gauche, candidate Jean-Luc Mélenchon. “For too long people have been made to feel that they were some kind of drain or problem for expecting free education, free healthcare or being able to stop working when they were old and spent.”

Take a deep breath. It feels good.

Politics is about assumptions. Actual policies follow from these original assumptions. If you assume that wealth and jobs are the result of confidence among, to use the Ayn Rand description, “producers”, their confidence has to be somehow engineered by government. And we should all be grateful if we manage to convince an employer to hire us. Being grateful is an emotion today’s leaders want to impart.

If you assume that wealth depends on the engineering of confidence among employers, then your attention naturally shifts to how to satisfy the markets by cutting public spending and slashing “red tape”.

And this assumption of a unity of interest between employer and employee can lead to some very strange places indeed.

Horseshit creators

Frank relates the tale of a rally held on US Labor Day in 2009, paid for by Don Blankenship, mine owner and CEO of Massey Energy. He tells the crowd he is there to “defend American labor because no-one else will”. The government, through incessant environmental and safety regulations, is “American workers’ worst nightmare”, he says.

Eight month later, 29 workers were dead after a massive underground explosion at a Massey mine.

Now, when we find a mine operator claiming that his own struggles against regulation are actually the struggles of mine workers – workers who are then killed because mine regulations are not properly observed by said operator, “ writes Frank, “we have stumbled upon a nearly perfect example of what the sociologists call ‘complete horseshit”’.

But horseshit has plenty of exponents these days. Take this article by this blog’s favourite conservative intellectual, Jesse Norman, with its Randian references to “producers” and the creation of products and the eliding of the huge class difference between those applying to work for companies and those who own and run them. There is an utter refusal to recognise that employees have to live with the consequences of decisions made by employers, but no opportunity to participate in their making.

Conservatives must, by their very nature, pretend that class differences, economic rather than cultural class differences, do not exist. “We are all in it together” is a phrase that contains so many fictions for just six words. But the real tragedy is our time is not that conservatives say that class differences don’t exist, but that what amounts to the Left can’t say that they do.

In his previous book, What’s the Matter with America, about why the poorest county in the US voted for George Bush, Thomas Frank lambasted the “gigantic error” made by the Democrats. “People don’t spontaneously understand their situation in the great sweep of things,” he wrote. “They don’t automatically know the courses of action that are open to them, the organisations they might sign up with, or the measures they should be calling for.”

Conservatives speak to those at society’s bottom on a daily basis, wrote Frank. “From the left they hear nothing, but from the Cons they get an explanation for it all.” Any alternative explanation, like the Occupy movement, has to come from nowhere.


Frank has spent two books documenting that failure of the “left of centre” and can appear nostalgic for a vanished time, the “middle class Republic” that America was after World War Two, but that has now become a plutocracy.

Nostalgia can mean an attachment to old fashioned solutions that don’t work anymore. “The age of the giant corporation is here to stay of course and as long as it is, big government must on hand to curb its abuses,” writes Frank. “When the system is corrupted … the obvious answer is to clean up government so it can perform its police function properly.”

The “government as policeman” solution is, to be frank, if you’ll pardon the description, not good enough. Leaving aside the fact that corporations have captured the political system and nobbled the policeman, the abuses of giant corporations require more drastic treatment than a healthy dose of good, old fashioned regulation.

There a You Tube video, highlighted by Frank, of a Republican Congresswoman, trying to placate some of her constituents, livid that their jobs have been outsourced by the corporation Verizon, with a homily about small businesses. It is worth watching for its comic value. But how exactly would a Rooseveltian liberal have responded? How would they have stopped the jobs disappearing to India or China? This isn’t 1965 anymore.

And, in any case, why make the assumption that the giant corporation is “here to stay”?

Another American writer, Gar Alperovitz, author of America Beyond Capitalism, laments the fact that traditional reforms, and lots of taxed funded inducements, have failed to lure major corporations to depressed areas. A full employment Keynesian strategy could work, in theory, he says, but in the real world the decay of “progressive political power” and its trade union base, means that, in practice, it won’t achieve the desired results.

“Given the inability of politics to provide meaningful solutions to the problems facing millions of Americans,” Alperovitz writes, “creating new institutional [my italics] forms appears as the only positive option available, difficult as this may be.”

But that difficulty will be the subject of a later review.

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