Paul Krugman and the Elephant in the Room The “liberal conscience” may be alive, but the progressive movement isn’t

Remember hope? And change?

For those who still thought rational, fact-based, human-centered, progressive public policy was within reach, 2014 was the year that the realities of the U.S. political landscape became undeniable: progressivism is not just on life support, it’s dead—and Scott Walker, Thom Tillis, Cory Gardner, and Sam Brownback are dancing on its grave. Even if many elected Democrats would like to deliver real change (and that assertion is questionable), it’s become clear that the system simply won’t allow it.

Consider that the epic economic collapse of 2008—itself arising from an unrestrained financial sector—was still a recent memory as voters went to the polls in 2014, yet nevertheless conservative Republicans beholden to Wall Street enjoyed significant electoral gains. Interpret this any way you wish, but one conclusion is undeniable: the system is owned and controlled by interests that are far more powerful than “We the People.” To the extent any progressive movement existed in the United States, it should be discussed in the past tense. Movement conservatism has won, and nothing is going to change without radically rethinking progressive strategy. That starts by trying to understand how and why things have developed the way they have.

Of all the attempts to assess the rightward lurch that the nation has experienced over the last four decades, one of the most widely cited is that put forward by Paul Krugman, the Nobel Laureate economist and New York Times columnist. Krugman’s 2007 bestseller, The Conscience of a Liberal, examines the rise of movement conservatism in the latter half of the twentieth century, giving due consideration to the usual cast of conservative characters—William F. Buckley, Barry Goldwater, Richard Nixon, Ronald Reagan, and others—while providing a roadmap of sorts for turning things around. Hailed as perceptive, cogent, eloquent, even courageous, Krugman’s exhortation has become a quasi-official restatement of liberalism, a view of history, politics, and economics that provides a starting point for progressive dialogue in a wide variety of contexts, from dorm rooms and cocktail parties to policy summits and campaign stops.

It’s too bad Krugman misses the elephant in the room.

Having lucidly expressed the values and vision of the liberal conscience, Krugman still fails to address the underlying systemic issue that has made progressive goals increasingly elusive. That systemic issue is the problem of excessive corporate power. By considering how even Krugman—a solid liberal and highly respected public intellectual—can go astray in assessing the American situation, we can better see why it is so important for progressives to unite behind the one issue that is fundamental to achieving long-term change.

The Ongoing Gilded Age

The breaking of paradigms is one sign of a valuable piece of writing, and Krugman doesn’t disappoint in this regard. For example, he dismisses the generally accepted notion that the Gilded Age—that period after the Civil War when large business interests faced little governmental obstruction in their quest for complete domination of American society—ended around 1900 with the dawn of what many call the Progressive Era. Instead, Krugman posits that the Gilded Age should be understood as continuing all the way up to the coming of the New Deal in the 1930s. After all, the actual “progress” during the so-called Progressive Era was quite modest, he points out, and was soon followed by the Republican-dominated freewheeling markets of the 1920s—all of which supports his thesis that the first three decades of the twentieth century should be considered a continuation of the Gilded Age.

This “Long Gilded Age” framing allows Krugman to make another point that is central to his thesis: the egalitarian policies of the New Deal brought about a period, starting in the immediate postwar years, in which the United States saw much general prosperity and a growing middle class, the product of the liberal economic policies that were predominant during that era. This egalitarian period ended in the 1970s as movement conservatism gained traction and the nation’s politics began shifting rightward, and we’ve been living with the results ever since: increasing wealth disparity, the demise of labor, and a disappearing middle class.

Krugman points to the postwar decades as the golden age of a “middle-class nation,” arguing that the country was at its best when functioning within such a framework—strong unions, progressive taxation, and a general acceptance of the role of government as a stabilizing influence in the economy. That Americans got a taste of this idyllic liberal society—where even Republican administrations operated with liberal assumptions (both Eisenhower and Nixon did much to solidify and expand upon New Deal policies)—allows  Krugman to cling to the hope that happy days may indeed someday arrive again, if we can just find our liberal conscience and proceed accordingly.

It’s hard to disagree with the assertion that the postwar era is proof that a more egalitarian America is possible, but that assertion alone hardly justifies optimism that a progressive resurgence can or will occur in our lifetime. In fact, Krugman’s own framework tells us that the postwar period was very much an anomaly—after all, it was preceded by a Long Gilded Age that spanned back to Reconstruction, and has been followed by what (so far) has been four decades of anti-egalitarian, conservative dominance that he himself calls a second Gilded Age (which shows no sign of abating). With this history, a more realistic assessment would conclude that the egalitarian postwar period was the rare exception that proves the rule: the U.S.system is controlled by interests that care little about perpetuating a “middle-class nation.”

Simple Reform as the Answer?

Nevertheless, even though Krugman acknowledges that postwar egalitarianism was a brief departure from what has otherwise been the anti-egalitarian norm, he sees its return as achievable via ordinary people using the political process to promote liberal policy. Specifically, in The Conscience of a Liberal and subsequent writings, he has pointed to universal health care as the primary issue on which liberals should focus, arguing that success on that issue can serve as a catalyst for further progressive ends.

And this is the strategic flaw that sends Krugman’s political analysis astray. Faced with his own historical analysis that portrays America’s entire industrialized history as almost one continuous Gilded Age—the only exception being a brief pause in the middle decades of the twentieth century—Krugman nevertheless doesn’t see any fundamental, systemic problem. Instead, like many others in the liberal camp, he sees reformist legislation as the means to a progressive, egalitarian resurgence.

Part of the reason Krugman sees the legislative avenue as plausible is that he sees a flaw in the democratic process—namely, racism—as a key obstacle that has obstructed progressive legislation to date, and he holds out hope that this obstacle may be withering with time. For example, while most of the Western world adopted universal healthcare in the years following World War II, efforts to do so in the United States stalled. Many assume that this was due to our natural distaste for government involvement in such matters—that quintessentially American trait of rugged individualism and personal responsibility—but Krugman posits instead that southern legislators opposed federally funded healthcare because they feared it would mean that whites and blacks might be required to seek medical care in desegregated facilities.

In fact, in tracing causation for the success of movement conservatism in the late twentieth century, Krugman, like many others, correctly observes that racism is a major factor. Even the rise of the religious right in the late 1970s, which surely was important to the overall conservative drift, had its roots in racism. Conventional wisdom often points to abortion, specifically the 1973 Roe v. Wade decision, as being the original motivation for the religious right, but the facts show that it was race—particularly the federal government’s removal of the tax-exempt status of Bob Jones University when it refused to desegregate in the mid-1970s—that ignited fundamentalist Christian political activism. The formation of the religious right was a direct result of that segregationist controversy, though religious conservative leaders realized they couldn’t build a national movement on a segregation platform, so they adopted abortion and homosexuality as their mobilizing issues.

This all suggests that the struggle of egalitarian policy in the United States relates to a social flaw that tainted the democratic process. A racist population, particularly one enamored by fundamentalist religion, is unlikely to exercise reason and sound judgment. They’ll get the government and policy they deserve. To some extent this is true, but closer examination shows that racism doesn’t fully explain the failure of the democratic process; excessive corporate power would almost certainly continue to obstruct progressive public policy even if racism declined.

The Deep, Systemic Problem

It helps to bear in mind that the causal factors bringing about Krugman’s idyllic, egalitarian era of a “middle-class nation” were major systemic crises—the Great Depression and the Second World War, and that even in the wake of these crises and the egalitarian policy that arose from them, corporate interests were still eventually able to reestablish and even solidify Gilded Age domination. The ability of corporate interests to re-establish dominance speaks to their staggering power and relentless vigilance.

This is a reality that Krugman and other liberal reformists rarely address, but it is a critically important issue that highlights the level of focus and commitment needed for real people to wrestle control. This isn’t a problem that can be solved with one or two ambitious pieces of legislation—it is deep and systemic, relating to the very nature of power within the republic. What’s needed is constitutional action put corporate power in its proper place for good, beneath the interests of real people.

Despite the lip service Americans pay to democracy, the apparatus of government is very much in the hands of corporate interests: almost all the lawyers and lobbyists in Washington, DC, work directly or indirectly for corporate interests, with real human beings enjoying no corresponding power or access. With a 24/7 focus on the singular goal of maximizing profit (and worse yet, short-term profit), combined with assets and resources far beyond those of ordinary citizens—and now with even direct influence on the electoral process—corporate interests are the real obstacle to both effective democracy and progressive public policy. If corporations are persons with constitutional rights akin to those of real humans, we must bear in mind that they are extremely powerful, narcissistic, amoral, psychopathic persons. And to the extent that their interests conflict with those of real people, they will fight relentlessly for themselves and they will usually win.

There isn’t one major area of public policy that is not greatly influenced by corporate power. It’s the reason universal healthcare has been such a struggle and the reason the Affordable Care Act doesn’t offer a public option. It’s the reason for massive military budgets. It’s the reason we are privatizing everything from prisons to schools and even, if Wall Street gets its way, Social Security. It’s the reason we’re still “debating” climate change. It’s the reason a vulnerable public is exploited to elect wing-nut politicians who will serve corporate interests when they get into office. It’s the reason labor has been crushed, temporary employment agencies are thriving, and executive pay is absurdly high. It’s the reason that critically important, major regulations (such as the Glass-Steagall Act that was passed to regulate banking during the Great Depression) can be relentlessly attacked and eroded, until they are eventually overturned. In short, it’s the reason progressivism is dead.

Of course it would be nice, as Krugman suggests, to think that the United States is slowly becoming less racist, and we can hope that such trends will have some positive effects on public policy. But we would be delusional, and guilty of misleading ourselves, to suggest that such social enlightenment alone will result in a reversal of Wall Street domination and a proliferation of progressive, human-centered policy. As progressives lick their wounds in 2014 and consider the future, they must focus on limiting corporate power. Otherwise, the “liberal conscience” will have little impact on the policy flowing from Washington.