America’s Divided Workers Are Facing Political Capture

Christopher Burns/Hay, Australia

American political discourse has recently seen the return of self-conscious class- and labor-oriented rhetoric.

On the right, Donald Trump campaigned on issues of protectionism, immigration restrictionism, and economic reform, all overtly for the benefit of the American worker, who had been left out of the prosperity of globalizing capital, or had even seen the collapse of their towns and industries, with no realistic alternatives.

Tucker Carlson has taken up the torch with calls for a new conservatism that doesn’t just serve capital by calling for lower marginal tax rates, but takes a more active approach in the hopes of creating an economy where normal young people, who don’t have immense talents and privileges, can afford to have families and homes at a reasonable standard of living.

On the left, the rise of Bernie Sanders and Alexandria Ocasio-Cortez has highlighted and accelerated a growing sympathy among millennials for a more aggressively socialist politics, calling for measures like increased minimum wage, curtailing of the political power of large companies and monopolies, and visionary state-directed economic programs like the proposed Green New Deal.

Much of the left millennial energy has been organized under the Democratic Socialists of America (DSA), which by membership is the largest socialist organization in the U.S. in over a hundred years.

It’s relatively easy to analyze this awakening through an economic frame: something big happened to the economy in about 1973, and since then, the median wage has stagnated. Jobs have become far less stable. Productivity and GDP have continued to grow, but the proceeds have increasingly gone to a wealthy minority. In response, many people, having little to no stake in economic growth, have decided that this is a political problem, and are agitating for something different.

By The State of Working America. Economic Policy Institute – http://stateofworkingamerica.org/charts/productivity-and-real-median-family-income-growth-1947-2009/, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=22653639

Combined with the wage stagnation, the basic costs of middle-class life have skyrocketed: housing, health care, and education. This combination of stagnating wages with rising costs has been termed the “middle-class squeeze.”

In May, the Organization for Economic Cooperation and Development (OECD) offered a concise summary of its report on the middle class:

“Middle-class households feel left behind and have questioned the benefits of economic globalisation. In many OECD countries, middle incomes have grown less than the average and in some they have not grown at all. Technology has automated several middle-skilled jobs that used to be carried out by middle-class workers a few decades ago. The costs of some goods and services such as housing, which are essential for a middle-class lifestyle, have risen faster than earnings and overall inflation.”

Within the last decade, it was still possible to hear commentators using statistical magic to write off the squeeze as imaginary, or just the result of poor millennial work ethic. Tone-deaf optimists assured people that things were getting better; after all, global poverty is declining.

The culmination of this was the Avocado Toast scandal: a young Australian millionaire chastised millennials for spending too much money on avocado toast and expensive coffees when they could instead pour their discretionary income into real estate or their own businesses. The subsequent public discussion brought the economic fundamentals of the squeeze to widespread attention: there’s no amount of saving with a normal wage in a negative-real-interest savings account that would ever allow one to buy a house in a major city, and most don’t have what it takes to start a business. Confident dismissals of the economic problem have since fallen by the wayside.

The history of this problem is interesting: from the period after World War II up until the fall of the Soviet Union, the American-led bloc and its political and economic structures were engaged in an ongoing struggle against a rival power. Ironically, one of the main ideological battles fought by this political machine was in defense of a spontaneous and politically neutral market economy against a coordinated and state-driven one. Complicating the narrative, the U.S. itself had engaged in extensive coordination between political and economic power from the New Deal to NASA. Western industrial might was not the result of spontaneous order free of hamfisted central planners, but the result of high-risk public investment and coordinated political strategizing, which enabled new technologies and markets alike to form. Ultimately, both societies manifested social orders in which managerial bureaucracies played important roles and which acted on a truly global scale, beyond the formal contours of nation-states. They were less different than they pretended to be, but in the process of ideological differentiation, the U.S. emphasized the uncontrolled market.

The Soviet collapse initiated an era of apparent liberal hegemony—a neoliberalism, which had incorporated the conservative reaction that originally carried Thatcher and Reagan to office. Many of the internal alliances which had shaped the Cold War era disappeared. New opportunities and new industries emerged, none of which were faced by overarching political pressures toward class collaboration. The impacts directly hit labor. Gains reflected in wages were concentrated at the top, weaker in the middle, and negative at the bottom.

The blame can’t be placed entirely on the pressures of globalization: employer power plays a significant role. Corporate power’s monopsonistic influence on labor markets, by firm consolidation, limited choices for workers, and direct tools like non-compete agreements, has significant effects on productivity and wages. A recent assessment by Glen Weyl, Eric Posner, and Suresh Naidu calculated 5–18% lower employment than a competitive labor market; likewise, they calculated that labor’s share of surplus is suppressed from what it would receive in a competitive market by a factor of up to nearly 30%.

Given the political vacuum surrounding the economic interests of labor, it’s not surprising to see candidates, policy wonks, and agitators of all kinds trying to fill it and build a new political coalition out of the working-class electorate.

But that working-class electorate is deeply divided. While there may be some agreement about automation, outsourcing, trade, and globalization in general, working-class Trump voters are not interested in following the progressive movement’s recent hard-fork to the left—especially on social and cultural issues. Even in the miraculous case of a political figure who is able to achieve a social-issue ceasefire, it’s unlikely that the coalition would remain stable. The temptation to defect on the arrangement and litigate social issues using whatever power the coalition had amassed would be too great. And at this point, even a successful ceasefire would freeze the social landscape in a way disagreeable both to the social conservatives reeling from accelerated changes and to those who think not enough social justice has been achieved.

It’s not possible to understand this internal divide without disaggregating the bloodless abstraction of the working class. While it is possible to theoretically or ideologically abstract the economic relationship, real workers exist in a complex web of loyalties and interests. Family, religion, culture, geography, and numerous other ties obfuscate the attempt to make class the definitive foundation of people’s identity.

DSA members are often concentrated in America’s large metropolitan centers and have some post-secondary educational background—even if currently unemployed or underemployed and pessimistic about future prospects. Due to the social values inculcated through university education and urban life, they are natural antagonists to rural, more religious Trump voters who are hostile to innovations in moral entrepreneurship and social rituals, such as pronoun usage, and especially don’t like such innovations being forced on them. These groups don’t like each other. No current political figure is strong enough to bridge that divide to create a powerful new coalition, despite the largely similar economic grievances.

The second big problem facing this resurgence of labor politics is that these factional interests don’t exist in isolation; in the absence of any strong organizations able to endogenously coordinate their power, to get anything done they have to collaborate in parties and institutions with allies which have distinctive and often contradictory interests—for example, institutional unions in the Democratic party coexist with powerful financial lobbyists.

This necessity for collaboration gives us an important hint about the fate of these movements. The vital point is that their bedfellows are by no means the movements’ equals in power and influence. Corporate power, foreign lobbies, the national security state, establishment cliques, and other interest groups in each party command organizational power, personal networks of influence, and often the backing of wealthy donors.

However, the mere existence of potential rivals does not, in itself, mean the end of a political movement. In fact, the ability to cooperate with and sometimes absorb such rivals is part and parcel of even the most radical political shifts. A good example is the important role played by former Tsarist officers in the development of the Red Army after the Bolshevik seizure of power. Men as prominent as the aristocratic Imperial Russian Army general Aleksei Brusilov, who gave his name to Imperial Russia’s greatest World War I military achievement, played a key role in developing the Soviet military apparatus. Rather than socialist revolution, their motivation was to defend Russian territorial integrity and rebuild the Russian state—a task for which they saw the Bolsheviks as the only option. Thus, the Red Army began its history with a majority of former-Imperial officers, including most of the staff at its military schools.

The example illustrates a larger point: significant transformations are generally not the result of a single agent, goal, or even set of motivations. In reality, multiple narratives are often in play, and coordination between them can be fleeting or incidental. In the case of Russia, the Bolsheviks were hyper-aware of their fragile military position. The same pragmatism that led them to absorb a large Tsarist officer corps led them to place the Red Army hierarchy under stringent political monitoring. They also worked to ensure that ideologically aligned officers were quickly trained and promoted, a task largely completed by the 1930s.

When analyzing how different factions cooperate, it’s important to take account of power differentials. Differences in things like a faction’s size, coordination ability, or human capital will impact how strong its role is in a coalition. If a particular faction—say, a party or an organizing body—is dependent on much more powerful collaborators, it will likely find itself unable to achieve any political goals which deviate from those collaborators. What this means in practice is that their work ultimately realizes the goal of their superior instead, since they can be successful only insofar as they integrate with this broader agenda. If a faction is strong, it may be able to use its collaborators as vehicles; if it is weak, it will likely function only as a support structure for these greater patrons.

This phenomenon is not merely the pattern of political upheaval, but also of everyday political life. Examples include anti-nuclear environmental groups, which have historically ended up functioning as a lobby for fossil-fuel interests. Likewise, many apparently avant-garde arts and culture magazines in the mid-20th century were ultimately discovered to be the product of a multi-pronged CIA front operation. In each case, the activist base functioned as a vehicle for larger and better-organized interests and was only able to fulfill its agenda insofar as it played this role.

One particular manifestation of this phenomenon is that of recuperation: the capture of a radical idea, movement, or set of images by establishment forces, followed by their integration into the power structure. As a result, they end up serving to entrench and legitimize the very power structure they initially sought to transform. One pertinent example is the World Economic Forum’s practice of flying out selected activists to Davos, where they proceed to ritually call out attendees and provide a spectacle of elite self-critique. Proposed by the French Marxist Guy Debord, the concept of recuperation is used to identify the pattern of how entrenched power structures can effectively react to and incorporate disruptions rooted in social alienation. This allows the structure to “refine its mechanism of spectacularization”—that is, to offer temporary or even illusory satisfaction while never addressing the fundamental tension.

Debord’s notion of a “society of the spectacle,” as well as his collective’s politically charged artistic responses, became ingrained in the punk, culture-jamming, and other pop-critique scenes, and were ultimately sold back to their participants ad nauseam. The recuperation of Debord’s project itself is a spectacular dialectical twist.

The awakening labor sympathies on both wings of American political life exist in a position of weakness. On the Democratic side, the Obama administration showed how even a popular president had difficulty challenging entrenched interests within the permanent institutions. The remnant institutional labor machines are still active, but have proven unable or unwilling to reverse the broader labor losses of the past few generations. Bold policy ideas alone cannot undo this. Moreover, the party’s left has not managed to expand far beyond those already in the Democratic voter fold. Even within their own party, figures like Elizabeth Warren and Bernie Sanders do well with educated whites, but suffer with black and Hispanic voters, and with less-educated whites. Those swathes of the country’s working class outside their party’s bounds would be even harder to flip; the cultural biases of educated whites in the party drive them apart from socially moderate or conservative segments of the country’s working class.

Despite all this, they may have more institutional capacity to work with than their Republican counterparts. While Trump won the presidency based on a populist campaign, he did not possess an array of institutions and staffers ready to implement his program. The administration’s beginning saw many positions going unfilled, and ultimately several entrenched factions managed to reassert themselves to some degree, particularly the war-hawks. Currently, it seems that Trump’s personal instincts are the only major barrier to a full-scale return of the entrenched agendas. While a number of media personalities and intellectual journals have begun delving into a new pro-worker conservatism, it is uncertain to what degree the project will achieve institutional longevity. The conservative wing has deep biases against unions, taxes, and other traditional labor solutions, which are obstacles to acting on pro-labor rhetoric.

British journalist Aris Roussinos has contrasted American attempts at a new conservatism with the sovereigntist projects in Europe. Unlike their American counterparts, these movements have achieved state power and have embraced a more rigorously post-liberal politics founded on Christian cultural roots, national sovereignty, and family-focused economic development. Hungary, Poland, and other countries involved in projects like Visegrad had barely a generation of experience with liberalism. Presumably, this also means that internal stakeholders were better able to adapt when political actors arose wanting to implement a new agenda. While segments of American conservatism may look favorably upon the results, the absence of political prerequisites would make it extremely difficult for an American equivalent to reorient domestic political structures. Roussinos explicitly draws the comparison with the left’s own populist resurgence:

The analogy is with the Democratic Socialists of America’s use of the language and symbolism of Communism to advance a modest and rather boring form of social democracy within the Democratic Party. American conservatives flirting with the genuine illiberalism or post-liberalism happening in Europe are merely using it as a piquant spice to enhance the attractiveness of a modest reform movement within conservatism, a fiery dash of Hungarian paprika on the same old American stodge.

The reality which Roussinos is hitting on is recuperation. Absent the political machinery, or more flexible existing interests, to become a dominant power within the American system, these movements face a role as inferior partners within their various networks of collaboration. Their bombastic rhetoric may spark initial opposition—even vehemence and violence—but ultimately the structure proves remarkably adaptive. Even a successful presidential run, as in the case of Trump, simply leaves the victor in a state of siege, able to sometimes block actions from their opponents but incapable of larger-scale reforms. The rhetoric of the popular movement becomes inducted into the political marketing world of PACs, think tanks, lobbyists, and grifter candidates—but without any real intention of achieving its original goals.

Enough of the original movement defects to the power structure, or is digested by it, that the threat is effectively neutralized. In the words of Debord and his collaborator, Daniel Blanchard: “[the capitalist order] must involve the public by incorporating elements of representation that correspond—in fragments—to social rationality. It must sidetrack the desires whose satisfaction is forbidden by the ruling order.”

The possibility for failure is deep, abiding, and structural. Where does this leave the worker? After all, the vast majority of people depend on their own labor to make a living.

The success of these resurgent labor-oriented movements will be determined by whether they can expand and develop their coordinating institutions, and collaborate with factions and currents at the top of the overall elite power structure.

One or more of the current factions would have to find a way to seriously expand its reach across party lines—say, by abandoning its divisive cultural commitments. As discussed above, that outreach across factional lines, pragmatically deescalating cultural divisions, is currently unthinkable for both sides. It would amount to a drastic shakeup of current party bases and a shifting of political allegiances. This could only occur if driven by new organizational energy that had already built up significant trust outside the current factions. Historically, such shifts occurred under the influence of non-party institutions which were able to effectively defend and mobilize particular demographics into a political force. Examples of this would be the development of the religious right, or the older union movements themselves. The development of such institutions could herald a longer-lasting shift. The return of concerns like industrial policy to political discourse are a factor to watch for this. The new area could be fertile ground for such line-crossing organizations to find their footing.

Recuperation isn’t inevitable. Though divided across parties and regions, workers, if they were to conceive of themselves as such, are still able to exercise power through the same means: coordinated action to determine the conditions under which that labor is provided. This results in the array of familiar tools, from collective bargaining to the general strike. Effective labor organization can even circumvent the need for more centralized policy solutions—for example, Germany did not introduce a uniform minimum wage until 2014, traditionally allowing industries to set these standards via negotiation.

But ultimately, the fate of labor depends on the character of the most powerful ruling factions in society, centered around the state. If the elite of the state sees it in its interests, and has the capacity, to discipline and guide capital towards growth and competition rather than political entrenchment, and to allow workers to take a share of the growth, then it can happen. If the state is captured or thwarted by crony factions with a larger interest in being able to exploit their own fiefdoms than in the health of the whole society, then no amount of labor organizing can overcome this entrenched power.

Concretely, there are a variety of problems which are essentially impossible to tackle without state political power: breaking up labor monopsony, strategic antitrust enforcement, attacking rent-seeking, and traditional concerns from healthcare to housing policy. State political power in the form of export-oriented industrial policy may also be used to address globalization issues.

But industrial policy is exactly the kind of state-driven reorganization of the economy that could involve a renegotiation of the position of labor in general, not just with respect to globalization; labor reforms could piggyback on and collaborate with reforms driven by other concerns as well.

Under industrial policy, the state takes an active role in spurring domestic industry and innovation. Advocates point to the successes of the Asian tiger economies in leapfrogging competitors and creating some of the world’s most advanced economies in only a generation. The most successful mix of policies tends to focus on spurring upstream industries via public research, investment, and sometimes with state-owned enterprises. This creates direct and indirect spillover effects down the development chain.

An important aspect of industrial policy is the use of export discipline to increase overall productivity. This is done by exposing strategic industries to the global market—the most cutthroat and competitive market to be in—and using it to test the economic fitness of companies. By allowing less competitive firms to be weeded out, resources and workers can transition to the more competitive ones. States can use their resources, and this competitive process, to pick those firms that are willing and able to do the job, and then use them to accelerate the overall productivity of industries. This is particularly useful when it comes to mission-oriented policies, which can spur the tackling of strategic economic goals from energy, to transportation, to space.

This is where the question of recuperation naturally arises. One of the effects of export discipline is that it tends to favor large, centralized, and integrated firms. In addition to natural tensions, the very market power that benefits the industrial policy process brings with it the threat of subversion and capture. The necessity of state alignment becomes obvious, as the state would need to ensure that large and mature firms remain in alignment, or else are strategically split up. But at the same time, the regular use of antitrust laws to break up such firms at the get-go would merely undermine the export discipline strategy.

So, to the extent that the state was pursuing a labor-benefit policy, and to ensure alignment, other tactics besides antitrust would be needed.

An interesting implication of this kind of industrial reorganization is that it accelerates the end of an apolitical economics. More specifically, it breaks the frame which treats the state as a manager at best and interfering brigand at worst. Rather, the state in this scenario becomes an active participant in the collective creation and distribution of wealth.

Political possibility is in the air again, now that old political coalitions are breaking down and the neoliberal consensus around globalization is increasingly viewed with distaste. But the working class is plagued by deep divisions, and it is naive to think that class alone is sufficient as a rallying mechanism. While currents on both the right and left have become conscious of the tie between labor’s disintegrating power and the populist upheaval, the very fact of their division makes their recuperation all but guaranteed. Existing interests and institutions are there to embrace labor in its vulnerable state and recuperate this new energy for their own ends.

If the new energy amounts to anything real, it will be because it develops a state consciousness and awareness of those tasks that only political power can see through—organized enough to coherently identify its allies and foes, and to become a formative power within the state.

Ash Milton is a market analyst and managing editor at Palladium Magazine.