我们需要的经济
https://www.project-syndicate.org/onpoint/the-economy-we-need-by-joseph-e-stiglitz-2019-05
2019 年 5 月 3 日 约瑟夫·E·斯蒂格利茨
约瑟夫·斯蒂格利茨（Joseph E. Stiglitz） 约瑟夫·斯蒂格利茨（Joseph E. Stiglitz），诺贝尔经济学奖得主、哥伦比亚大学教授，世界银行前首席经济学家（1997-2000）、美国总统经济顾问委员会主席、联席主席 碳价格高级别委员会的成员。 他是国际企业税收改革独立委员会的联合主席，也是 1995 年 IPCC 气候评估的主要作者。
经过 40 年的市场原教旨主义，美国和志同道合的欧洲国家辜负了绝大多数公民的期望。 在这一点上，只有新的社会契约 — — 保证公民的医疗保健、教育、退休保障、经济适用房和体面的工作和体面的报酬 — — 才能拯救资本主义和自由民主。
纽约 — — 三年前，美国总统唐纳德·特朗普的当选和英国脱欧公投证实了我们这些长期研究收入统计数据的人已经知道的事实：在大多数发达国家，市场经济一直让社会的很大一部分人失望。
没有哪个地方比美国更能体现这一点。 长期以来，美国一直被视为自由市场个人主义承诺的典范，但如今，与大多数其他发达国家相比，美国的不平等程度更高，向上的社会流动性也更低。 在经历了一个世纪的上升之后，美国的平均预期寿命现在正在下降。 对于收入分配最底层 90% 的人来说，实际（经通货膨胀调整后）工资停滞不前：今天典型男性工人的收入与 40 年前相当。
与此同时，许多欧洲国家试图效仿美国，而那些成功的国家，尤其是英国，现在正在遭受类似的政治和社会后果。 美国可能是第一个创建中产阶级社会的国家，但欧洲也紧随其后。 第二次世界大战后，在为公民创造机会方面，中国在很多方面都优于美国。 通过各种政策，欧洲国家创建了现代福利国家，以提供社会保护，并在市场本身支出不足的领域进行重要投资。
几十年来，人们所熟知的欧洲社会模式一直很好地服务于这些国家。 面对全球化、技术变革和其他破坏性力量，欧洲各国政府能够控制不平等并保持经济稳定。 当2008年金融危机和随后的欧元危机爆发时，福利国家最强的欧洲国家，尤其是斯堪的纳维亚国家，表现最好。 与许多金融界人士的想法相反，问题不在于国家对经济的干预过多，而在于干预太少。 这两场危机都是金融部门监管不足的直接结果。
秋季之后
现在，大西洋两岸的中产阶级正在被掏空。 扭转这种困境需要我们找出问题所在，并通过拥抱进步资本主义来制定新的前进方向，在承认市场优点的同时，也认识到其局限性，并确保经济为每个人的利益而运转。
我们不能简单地回到二战后几十年西方资本主义的黄金时代，当时大多数公民似乎都能过上中产阶级的生活方式。 我们也不一定愿意。 毕竟，这一时期的“美国梦”主要是为少数享有特权的人保留的：白人男性。
对于我们目前的状况，我们要感谢美国前总统罗纳德·里根和英国前首相玛格丽特·撒切尔。 20 世纪 80 年代的新自由主义改革基于这样的理念：不受约束的市场将通过神秘的涓滴过程带来共同繁荣。 我们被告知，降低富人的税率、金融化和全球化将提高每个人的生活水平。 相反，美国的增长率下降至战后时期水平的三分之二左右——这是一个金融监管严格、最高边际税率始终高于 70% 的时期——而且财富和收入的更大份额来自于战后时期。 有限的增长被输送到了最富有的1%。 我们没有看到承诺的繁荣，而是去工业化、两极分化和中产阶级萎缩。 除非我们改变剧本，否则这些模式将继续存在——或者变得更糟。
幸运的是，市场原教旨主义还有另一种选择。 通过政府、市场和公民社会之间务实的权力再平衡，我们可以迈向更自由、更公平、更高效的体系。 进步资本主义意味着在选民和民选官员、工人和企业、富人和穷人之间建立新的社会契约。 为了使中产阶级生活水平再次成为大多数美国人和欧洲人的现实目标，市场必须为社会服务，而不是相反。
财富掠夺者的入侵
与新自由主义不同，进步资本主义建立在对当今价值如何创造的正确理解的基础上。 国家真正和可持续的财富不是来自对国家、自然资源和人民的剥削，而是来自人类的聪明才智和合作，而这往往是由政府和民间社会机构推动的。 自十八世纪下半叶以来，提高生产力的创新一直是活力和更高生活水平的真正驱动力。
在几个世纪的几近停滞之后，工业革命开启的经济快速进步依赖于两大支柱。 第一个是科学，通过科学我们可以理解周围的世界。 第二个是社会组织，它使我们能够比单独工作更有效率地一起工作。 随着时间的推移，法治、具有制衡制度的民主以及普遍标准和规范等制度加强了这两个支柱。
简单思考一下，很明显这些都是物质繁荣的源泉。 然而，财富创造常常与财富获取相混淆。 个人和公司可以依靠市场力量、价格歧视和其他形式的剥削致富。 但这并不意味着他们对社会财富做出了任何贡献。 相反，这种行为往往会让其他人的整体处境变得更糟。 经济学家将这些寻求获取比自己创造的经济蛋糕更大份额的财富掠夺者称为寻租者。 这个术语起源于土地租金：那些获得土地租金的人并不是自己努力的结果，而仅仅是所有权的结果，通常是继承的。
这种有害行为在美国经济中尤其普遍，越来越多的行业已被少数公司所主导。 这些大型企业利用其市场力量以牺牲其他人的利益为代价来充实自己。 通过收取更高的价格，他们实际上降低了消费者的生活水平。 在新技术的帮助下，他们可以而且确实进行大规模歧视，这样价格就不再由市场决定（找到使需求和供给相等的单一价格），而是通过算法确定客户愿意的最高价格 支付。
与此同时，美国企业利用离岸外包的威胁来压低国内工资。 当这还不够时，他们游说顺从的政客进一步削弱工人的议价能力。 这些努力被证明是有效的：在大多数发达经济体中，加入工会的工人比例已经下降，尤其是在美国，工人的收入份额也急剧下降。
没有理由
虽然技术进步和新兴市场增长无疑在中产阶级的衰落中发挥了一定作用，但它们对于经济政策来说却是次要的。 我们知道这一点，因为相同的因素在不同国家会产生不同的影响。 中国的崛起和技术变革随处可见，但与挪威等许多其他国家相比，美国的不平等程度明显更高，社会流动性更低。
同样，在金融放松管制最严重的地方，市场操纵、掠夺性贷款和信用卡收费过高等金融部门的滥用行为也同样严重。
或者想想特朗普对贸易协定的痴迷。 就美国工人受到政策制定者的恶劣服务而言，这并不是因为发展中国家的贸易谈判代表比美国谈判代表更聪明。 事实上，美国通常会得到几乎它所要求的一切。 问题在于，它的要求反映的是美国企业的利益，而不是普通公民的利益。
尽管现在的情况很糟糕，但情况还会变得更糟。 考虑一下美国的收入不平等。 人工智能和机器人化已经被誉为未来增长的引擎。 但在现行的政策和监管框架下，许多人将失去工作，而政府几乎无法帮助他们找到新的工作。 仅自动驾驶汽车就会剥夺数百万人的生计。 与此同时，我们的科技巨头正在竭尽全力剥夺政府的应对能力，而不仅仅是通过开展减税运动：他们在避税和剥削消费者方面表现出了与之前在制定减税政策时所表现出的同样的天才。 - 边缘创新。 此外，他们很少（如果有的话）尊重人们的隐私。 他们的商业模式和行为实际上不受监管。
尽管如此，我们的经济失调是我们自己的政策造成的，这一事实还是有希望的。 一些面临这些全球力量的国家已经采取了一些政策，这些政策带来了充满活力的经济，普通公民也获得了繁荣。 通过进步资本主义改革，我们可以开始恢复经济活力并确保所有人的平等和机会。 当务之急应该是遏制剥削并鼓励创造财富，而这最好（或只能）通过人们共同努力来完成，特别是通过政府。
不可或缺的状态
无论财富掠夺采取何种形式——从滥用市场力量和信息不对称到从环境退化中获利——都有特定的政策和法规可以防止最坏的结果，并产生深远的经济和社会效益。 减少因空气污染、吸毒过量和“绝望而死”的人数，意味着有更多的人为社会做出富有成效的贡献。
自从里根和撒切尔将监管定为“繁文缛节”的代名词以来，监管就名声不好。 但监管往往会提高效率。 生活在城市中的任何人都知道，如果没有红绿灯——管理十字路口车流的简单“规则”——我们将生活在永久的交通堵塞中。 如果没有空气质量标准，洛杉矶和伦敦的雾霾将比北京和德里的空气更糟糕。 私营部门永远不会自行承担遏制污染的责任。 问问大众汽车就知道了。
特朗普和他任命的解散美国政府的游说者正在竭尽全力废除保护环境、公共卫生甚至经济的法规。 大萧条后的四十多年里，强有力的监管框架阻止了金融危机，直到 20 世纪 80 年代，它被视为“扼杀”创新。 第一波放松管制带来了储蓄和贷款危机，随后是 20 世纪 90 年代更多的放松管制和互联网泡沫，然后是 2008 年的全球金融危机。当时，世界各国试图重写规则，以 防止复发。 但现在特朗普政府正在尽其所能扭转这一进展。
因此，为确保市场按照应有的方式运行（竞争性）而实施的反垄断法规也被取消。 通过遏制寻租、反竞争行为和其他滥用行为，我们将提高效率、增加产量并刺激更多投资。 更好的是，我们将腾出资源用于真正改善福祉的活动。 如果我们最优秀的学生中进入银行业的人数减少，也许会有更多的学生进入研究领域。
两者都面临着巨大的挑战，但一个是专注于利用他人的优势，另一个是增加我们所知道的和我们能做的。 而且，由于剥削的负担往往最重地落在经济金字塔底层的人身上，我们将减少不平等并加强美国社会的结构。
顾名思义，进步资本主义承认市场的力量和局限性。 事实很简单，如果放任私营部门自行其是，某些东西（如污染）总是会生产过多，而另一些东西（如基础研究）生产太少，而基础研究是创新和经济活力的根源。 政府不仅可以发挥核心作用，限制私营部门做不该做的事，还可以鼓励私营部门做应该做的事。 通过集体行动——通过政府——我们可以做到我们单独无法做到、市场本身也无法做到的事情。 国防是一个明显的例子，但大规模的创新——例如互联网和人类基因组计划的创建——是改变我们生活的公共支出的例子。
私营部门也永远不会提供作为任何体面社会基础的许多普遍服务。 美国政 现有条件）。 事实证明，在其中许多领域，政府比私营部门更有效率。 社会保障的管理成本只是私人退休计划的一小部分，而且社会保障涵盖更广泛的风险，例如与通货膨胀相关的风险。
我们唯一的选择
我所描述的这种常识性法规和改革对于恢复增长并使大多数美国人和欧洲人重新过上中产阶级生活是必要的。 但它们还不够。 我们需要的是一个新的二十一世纪的社会契约，以确保所有公民都能获得医疗保健、教育、退休保障、经济适用房以及体面的工作和报酬。
许多国家已经表明，这种社会契约的各个要素是可以实现的。 毕竟，美国是发达国家中唯一不承认医疗保健是一项基本人权的国家。 具有讽刺意味的是，尽管美国在医疗保健上的支出（无论是人均支出还是占 GDP 的比重）都高于任何其他发达国家，但其以私营为主的医疗体系却带来了更糟糕的结果。 美国的预期寿命仅比哥斯达黎加高一点点，哥斯达黎加是一个中等收入国家，人均国内生产总值仅为美国的五分之一。
美国为这些失败付出了高昂的代价，而且随着时间的推移，其成本很可能会继续增加。 壮年男性的劳动力参与率处于历史低位，女性的劳动力参与率也开始下降。 许多离开劳动力市场的人都患有慢性健康问题，并正在服用处方止痛药，这加剧了特朗普领导下的美国的阿片类药物危机。 21%的美国儿童在贫困中长大，公共教育持续投资不足无疑将影响未来的生产力。
从进步资本主义的角度来看，实现新社会契约的关键是通过公共选择对福祉至关重要的服务。 公共选择扩大了消费者的选择并刺激了竞争。 反过来，竞争将导致更低的价格和更多的创新。 许多人希望 2010 年《平价医疗法案》（奥巴马医改法案）能够纳入公共健康保险选择。 但最终，行业游说者成功地将其从最终法案中删除。 那是个错误。
除了医疗保健之外，美国还需要退休账户、抵押贷款和学生贷款的公共选择。 就退休而言，这可能意味着那些希望在退休期间获得更多收入的个人可以选择在劳动力队伍中为社会保障缴款更多，同时退休福利也会相应增加。 这不仅比支付私人补充计划更有效率，而且更有效。 它还将保护公民免受财富管理公司的剥削。 事实上，许多这样的公司已经游说反对必须遵守任何信托义务，有效地辩称，如果他们不能欺骗客户，那么他们就无法赚到足够的钱来证明他们的存在是合理的。 从这个角度来看，利益冲突只是二十一世纪资本主义混乱的一部分：为什么还要强迫公司披露它们呢？
此外，由于美国银行现在声称它们无法承担承销抵押贷款的风险，因此大约 90% 的住房贷款都是由联邦政府支持的。 但如果纳税人已经承担了几乎所有的风险，而私营部门继续获得所有利润，那么就没有理由不选择公共部门。 政府可以开始向任何纳税五年的人提供传统的 20% 30 年期抵押贷款，利率略高于借款利率。 而且，与私人抵押贷款不同的是，私人抵押贷款实际上是为了确保数百万人在金融危机中失去住房而设计的，而公共选择可以设计出来，使工人在面临暂时困难时能够留在家中。
回到道德
这些建议中的大多数都是显而易见的。 然而，由于既得利益的影响，我们需要的经济改革将面临严峻的政治挑战。 这就是严重经济不平等的问题：它不可避免地引起并加剧政治和社会不平等。
当最初的进步运动在美国十九世纪末的镀金时代出现时，其主要目标是从大垄断资本家及其政治亲信手中夺取民主治理。 今天的进步资本主义也是如此。 它要求我们扭转共和党通过压制选民、不公正选区和其他反民主手段来剥夺大部分选民选举权的系统性努力。 它还要求我们减少金钱对政治的影响，恢复适当的制衡。 特朗普总统任期提醒我们，这种检查对于民主的正常运作是不可或缺的。 但它也暴露了现有机构的局限性（例如选举团，总统是通过选举团选出的，而参议院，像怀俄明州这样人口不足 60 万的小州，拥有与加利福尼亚州相同的选票，几乎有 4000万），强调了结构性政治改革的必要性。
对美国和欧洲来说，我们的共同繁荣和代议制民主的未来都处于危险之中。 近年来，西方公众不满情绪的爆发反映出公民日益增长的经济和政治无力感，他们眼睁睁地看着自己过上中产阶级生活的机会在眼前消失。 进步资本主义寻求遏制集中货币在我们经济和政治中的过度权力。
但还有更多的问题：我们的公民社会和我们作为个人和集体的身份感。 我们的经济塑造了我们的身份，在过去 40 年里，围绕不道德（如果不是不道德）的唯物主义和逐利的核心建立的经济创造了拥抱这些价值观的一代人。
事情不一定是这样的。 我们可以拥有一个更加富有同情心和关爱的经济，围绕合作社和其他营利性企业的替代方案建立。 我们可以设计更好的公司治理体系，其中不仅仅考虑短期利润。 我们可以而且应该期待利润最大化的公司有更好的行为——而适当的监管将消除一些不当行为的诱惑。
我们对新自由主义进行了40年的实验。 证据已经存在，但无论如何衡量，它都失败了。 从最重要的衡量标准——普通公民的福祉——来看，它惨败了。 我们需要拯救资本主义。 渐进的资本主义改革议程是我们最好的机会。
The Economy We Need
https://www.project-syndicate.org/onpoint/the-economy-we-need-by-joseph-e-stiglitz-2019-05
Joseph E. Stiglitz, a Nobel laureate in economics and University Professor at Columbia University, is a former chief economist of the World Bank (1997-2000), chair of the US President’s Council of Economic Advisers, and co-chair of the High-Level Commission on Carbon Prices. He is Co-Chair of the Independent Commission for the Reform of International Corporate Taxation and was lead author of the 1995 IPCC Climate Assessment.After 40 years of market fundamentalism, America and like-minded European countries are failing the vast majority of their citizens. At this point, only a new social contract – guaranteeing citizens health care, education, retirement security, affordable housing, and decent work for decent pay – can save capitalism and liberal democracy.
NEW YORK – Three years ago, US President Donald Trump’s election and the United Kingdom’s Brexit referendum confirmed what those of us who have long studied income statistics already knew: in most advanced countries, the market economy has been failing large swaths of society.
Nowhere is this truer than in the United States. Long regarded as a poster child for the promise of free-market individualism, America today has higher inequality and less upward social mobility than most other developed countries. After rising for a century, average life expectancy in the US is now declining. And for those in the bottom 90% of the income distribution, real (inflation-adjusted) wages have stagnated: the income of a typical male worker today is around where it was 40 years ago.
Meanwhile, many European countries have sought to emulate America, and those that succeeded, particularly the UK, are now suffering similar political and social consequences. The US may have been the first country to create a middle-class society, but Europe was never far behind. After World War II, in many ways it outperformed the US in creating opportunities for its citizens. Through a variety of policies, European countries created the modern welfare state to provide social protection and pursue important investments in areas where the market on its own would underspend.
The European social model, as it came to be known, served these countries well for decades. European governments were able to keep inequality in check and maintain economic stability in the face of globalization, technological change, and other disruptive forces. When the 2008 financial crisis and subsequent euro crisis erupted, the European countries with the strongest welfare states, particularly the Scandinavian countries, fared the best. Contrary to what many in the financial sector would like to think, the problem was not too much state involvement in the economy, but too little. Both crises were the direct result of an under-regulated financial sector.
After the Fall
Now, the middle class is being hollowed out on both sides of the Atlantic. Reversing this malaise requires that we figure out what went wrong and chart a new course forward, by embracing progressive capitalism, which, while acknowledging the virtues of the market, also recognizes its limitations and ensures that the economy works for the benefit of everyone.
We cannot simply return to the golden age of Western capitalism in the decades after World War II, when a middle-class lifestyle seemed within reach of a majority of citizens. Nor would we necessarily want to. After all, the “American dream” during this period was mostly reserved for a privileged minority: white males.
We can thank former US President Ronald Reagan and former British Prime Minister Margaret Thatcher for our current state of affairs. The neoliberal reforms of the 1980s were based on the idea that unfettered markets would bring shared prosperity through a mystical trickle-down process. We were told that lowering tax rates on the rich, financialization, and globalization would result in higher standards of living for everybody. Instead, the US growth rate fell to around two-thirds of its level in the post-war era – a period of tight financial regulations and a top marginal tax rate consistently above 70% – and a greater share of the wealth and income from this limited growth was funneled to the top 1%. Instead of the promised prosperity, we got deindustrialization, polarization, and a shrinking middle class. Unless we change the script, these patterns will continue – or worsen.
Fortunately, there is an alternative to market fundamentalism. Through a pragmatic rebalancing of power between government, markets, and civil society, we can move toward a freer, fairer, and more productive system. Progressive capitalism means forging a new social contract between voters and elected officials, workers and corporations, rich and poor. To make a middle-class standard of living a realistic goal once again for most Americans and Europeans, markets must serve society, rather than vice versa.
Invasion of the Wealth Snatchers
Unlike neoliberalism, progressive capitalism is based on a proper understanding of how value is created today. The true and sustainable wealth of nations comes not from exploiting countries, natural resources, and people, but from human ingenuity and cooperation, often facilitated by governments and civil-society institutions. Since the second half of the eighteenth century, productivity-enhancing innovation has been the real driver of dynamism and higher living standards.
The rapid economic progress inaugurated by the Industrial Revolution, following centuries of near stagnation, rests on two pillars. The first is science, through which we can apprehend the world around us. The second is social organization, which allows us to be more productive working together than we ever could be on our own. Over time, institutions such as the rule of law, democracies with systems of checks and balances, and universal standards and norms have strengthened both pillars.
On brief reflection, it should be obvious that these are the sources of material prosperity. And yet wealth creation is often confused with wealth extraction. Individuals and corporations can become rich by relying on market power, price discrimination, and other forms of exploitation. But that does not mean they have made any contribution to the wealth of society. On the contrary, such behavior often leaves everyone else worse off overall. Economists refer to these wealth snatchers, who seek to grab a larger share of the economic pie than they create, as rent-seekers. The term originated from land rents: those who received them did so not as a result of their own efforts, but simply as a consequence of ownership, often inherited.
Such harmful behavior is especially prevalent in the US economy, where more and more sectors have come to be dominated by just a few firms. These mega-corporations have used their market power to enrich themselves at the expense of everyone else. By charging higher prices, they have effectively lowered consumers’ living standards. With the help of new technologies, they can – and do – engage in mass discrimination, such that prices are set not by the market (finding the single price that equates demand and supply), but by algorithmic determinations of the maximum a customer is willing to pay.
At the same time, US corporations have used the threat of offshoring to drive down domestic wages. And when that hasn’t sufficed, they have lobbied pliant politicians to weaken workers’ bargaining power further. These efforts have proved effective: the share of workers who belong to unions has fallen across most advanced economies, but especially in the US, and the share of income going to workers has declined precipitously.
No Excuses
While advances in technology and emerging-market growth have certainly played some role in the decline of the middle class, they are of secondary importance to economic policy. We know this because the same factors have had different effects across countries. The rise of China and technological change have been felt everywhere, but the US has significantly higher inequality and less social mobility than many other countries, such as Norway.
Likewise, where financial deregulation has gone the furthest, so have financial-sector abuses such as market manipulation, predatory lending, and excessive credit-card fees.
Or consider Trump’s obsession with trade agreements. Insofar as US workers have been ill-served by policymakers, it is not because trade negotiators from developing countries outsmarted US negotiators. In fact, the US usually gets almost everything it asks for. The problem is that what it asks for reflects the interests of US corporations, not of ordinary citizens.
And as bad as things are now, they are about to get worse. Consider America’s income inequality. Already, artificial intelligence and robotization are being hailed as the engines of future growth. But under the prevailing policy and regulatory framework, many people will lose their jobs, with little help from government to find new ones. Autonomous vehicles alone will deprive millions of their livelihood. At the same time, our tech giants are doing what they can to deprive government of the ability to respond, and not just by campaigning for lowering taxes: They are demonstrating the same genius in avoiding taxes and exploiting consumers that they previously showed in developing cutting-edge innovations. Moreover, they have shown little, if any, regard for people’s privacy. Their business models and behavior are effectively exempt from oversight.
Still, there is hope in the fact that our economic dysfunction is the result of our own policies. Some countries facing these same global forces have adopted policies that have led to dynamic economies in which ordinary citizens have prospered. Through progressive-capitalist reforms, we can start to restore economic dynamism and ensure equality and opportunity for all. The top priority should be to curb exploitation and encourage wealth creation, and this can best – or only – be done by people working together, especially through government.
The Indispensable State
Whatever form wealth-snatching takes – from the abuse of market power and information asymmetries to profiting from environmental degradation – there are specific policies and regulations that could both prevent the worst outcomes and yield far-reaching economic and social benefits. Having fewer people die from air pollution, drug overdoses, and “deaths of despair,” will mean having more people who contribute productively to society.
Regulation has had a bad name since Reagan and Thatcher made it synonymous with “red tape.” But regulation often improves efficiency. Anyone living in a city knows that without stoplights – a simple “regulation” governing the flow of cars through an intersection – we would live in perpetual gridlock. Without air quality standards, the smog in Los Angeles and London would be worse than the air in Beijing and Delhi. The private sector would never take it upon itself to curb pollution. Just ask Volkswagen.
Trump and the lobbyists he has appointed to dismantle the US government are doing everything they can to strip away regulations protecting the environment, public health, and even the economy. For more than four decades after the Great Depression, a strong regulatory framework prevented financial crises, until it came to be seen, in the 1980s, as “stifling” innovation. With the first wave of deregulation came the savings and loan crisis, followed by more deregulation and the dot-com bubble in the 1990s, and then the global financial crisis in 2008. At that point, countries around the world tried to rewrite the rules to prevent a recurrence. But now the Trump administration is doing what it can to reverse that progress.
So, too, the antitrust regulations implemented to ensure that markets work like they are supposed to – competitively – have been stripped back. By curbing rent-seeking, anticompetitive practices, and other abuses, we would improve efficiency, increase production, and spur more investment. Better still, we would free up resources for activities that actually improve wellbeing. If fewer of our best students went into banking, perhaps more would go into research. The challenges in both are great, but one is focused on taking advantage of others, the other on adding to what we know and to what we can do. And, because the burden of exploitation tends to weigh most heavily on those at the bottom of the economic pyramid, we would reduce inequality and strengthen the fabric of American society.
As the term implies, progressive capitalism recognizes both the power and the limitations of markets. It is simply a fact that, left to its own devices, the private sector will always produce too much of some things, like pollution, and too little of others, like basic research, which is the taproot of innovation and economic dynamism. Government has a central role to play not just in restraining the private sector from doing what it shouldn’t, but in encouraging it to do what it should. And through collective action – through government – we can do things that we couldn’t do alone and which the market on its own won’t. Defense is the obvious example, but the large-scale innovations – such as the creation of the Internet and the Human Genome Project – are examples of public expenditures that have transformed our lives.
Nor will the private sector ever provide many of the universal services that are the basis of any decent society. The reason the US government created Social Security, Medicare, Medicaid, and unemployment and disability insurance is that entrepreneurs and corporations would not provide these essential services, or did so with unacceptable costs and restraints (such as denial of health insurance to those with pre-existing conditions). And in many of these areas, the government has proved to be more efficient than the private sector. Social Security’s administrative costs are a fraction of those for private retirement plans, and Social Security covers a broader array of risks, such as those associated with inflation.
Our Only Option
The kind of commonsense regulations and reforms I have described are necessary to restore growth and to bring a middle-class life back into reach for most Americans and Europeans. But they are not sufficient. What we need is a new twenty-first-century social contract to ensure that all citizens are guaranteed access to health care, education, security in retirement, affordable housing, and a decent job with decent pay.
Many countries have already shown that discrete elements of this social contract are achievable. The US, after all, stands alone among developed countries in not recognizing health care as a basic human right. Ironically, while the US spends more on health care – both per capita and as a share of GDP – than any other developed country, its predominantly private system delivers worse outcomes. US life expectancy is barely higher than that of Costa Rica, a middle-income country with one-fifth the per capita GDP of America.
The US pays a high price for these failures, the costs of which will most likely continue to grow over time. The labor-force participation rate for prime-age men is at historic lows, and the rate for women has begun to decline, too. Many of those who have left the labor market are suffering from chronic health problems and are taking prescription pain medications, contributing to the opioid crisis that has come to define Trump’s America. With 21% of American children growing up in poverty, persistent underinvestment in public education will undoubtedly weigh on future productivity.
From a progressive-capitalist perspective, the key to delivering a new social contract is through a public option for services that are essential to wellbeing. Public options expand consumer choice and spur competition. Competition, in turn, will lead to lower prices and more innovation. Many hoped that the 2010 Affordable Care Act (Obamacare) would include a public option for health insurance. But, in the event, industry lobbyists succeeded in getting it dropped it from the final bill. That was a mistake.
Beyond health care, the US also needs a public option for retirement accounts, mortgages, and student loans. In the case of retirement, this could mean that individuals who want more income during retirement would have the option to contribute more to Social Security during their years in the labor force, with commensurate increases in retirement benefits. This would not only be more efficient than paying into a private supplemental plan; it would also protect citizens from exploitative wealth-management firms. In fact, many of these firms have lobbied against having to abide by any fiduciary obligations at all, effectively arguing that if they can’t fleece their clients, then they can’t make enough money to justify their existence. Conflicts of interest, from this perspective, are just part of the rough-and-tumble of twenty-first-century capitalism: why even force firms to disclose them?
Moreover, because US banks now claim that they can’t take on the risk of underwriting mortgages, roughly 90% of all home loans are backed by the federal government. But if taxpayers have already assumed nearly all of the risk while the private sector continues to reap all of the profits, there is no reason not to have a public option. The government could start offering a conventional 20% 30-year mortgage to anyone who has paid taxes for five years, at a rate just a little above the rate at which it borrows money. And, unlike private mortgages, which were virtually designed to ensure that millions would lose their homes in the financial crisis, a public option could be devised to enable workers to stay in their homes when they faced a temporary hardship.
Back to Morality
Most of these proposals are no-brainers; yet the economic reforms we need will face serious political challenges because of the influence of vested interests. That’s the problem with severe economic inequality: it inevitably gives rise to and reinforces political and social inequality.
When the original Progressive movement emerged during America’s late-nineteenth-century Gilded Age, its main objective was to wrest democratic governance from the great monopoly capitalists and their political cronies. The same goes for progressive capitalism today. It requires that we reverse the Republican Party’s systematic effort to disenfranchise large segments of the electorate through voter suppression, gerrymandering, and other anti-democratic techniques. It also requires that we reduce the influence of money in politics, and restore proper checks and balances. The Trump presidency has reminded us that such checks are indispensable for the proper functioning of democracy. But it has also exposed the limits of existing institutions (such as the Electoral College, through which the president is chosen, and the Senate, where a small state like Wyoming, with fewer than 600,000 people, has the same vote as California, with nearly 40 million), underscoring the need for structural political reform.
At stake in both America and Europe is our shared prosperity and the future of representative democracy. The explosion of public discontent across the West in recent years reflects a growing sense of economic and political powerlessness on the part of citizens, who are seeing their chances of having a middle-class life evaporate before their eyes. Progressive capitalism seeks to curb the excessive power of concentrated money in our economy and our politics.
But there is even more at stake: our civil society and our sense of identity, both as individuals and collectively. Our economy shapes who we are, and over the past 40 years, an economy built around a core of amoral (if not immoral) materialism and profit-seeking has created a generation that embraces those values.
It doesn’t have to be this way. We can have a more compassionate and caring economy, built around cooperatives and other alternatives to for-profit enterprise. We can design better systems of corporate governance, where more than just short-run profit matters. We can and should expect better behavior from our profit-maximizing firms – and proper regulation will take away some of the temptations to misbehave.
We have conducted a 40-year experiment with neoliberalism. The evidence is in, and by any measure, it has failed. And by the most important measure – the wellbeing of ordinary citizens – it has failed miserably. We need to save capitalism from itself. A progressive capitalist reform agenda is our best chance.
