One Big Question

Last Thursday, I attended a conclave, sponsored by the Frederich Ebert Foundation, of about 20 American liberals (chiefly economists and union representatives) and 20 German social democrats (economists, unionists, Social Democratic Party officials, and a couple of stray businessmen) to see what we could learn from each country’s respective economic, social, and political arrangements. Early on, one German friend posed a question to us Americans: “Where’s your [i.e., America’s] learning curve?”

What he meant was that Germany and much of continental Europe had relearned certain key lessons after the financial meltdown of 2008 and its calamitous aftermath that America had apparently failed to process—chiefly, the need for an active and resourceful government capable of regulating markets and boosting the economy when the private sector is flat on its back. To be sure, with Northern Europe (Germany in the lead) currently promoting austerity to Southern Europe (Greece above all), it’s not clear if Europe has learned all the necessary lessons, either. But what my friend meant was that even German conservatives now had a greater appreciation of the role of government and a greater wariness toward financial markets, while American conservatives (hysterically) and some centrists (a tad less hysterically) had responded to the failure of the markets by going to war against the state.

As I thought about my friend’s query, the old question that Werner Sombart, the German sociologist, popped more than 100 years ago came to mind. Why, Sombart asked in a 1906 book with the same title as the question, is there no socialism in the United States? (Sombart’s answer was that American prosperity undermined the prospects for American socialism. “On the shoals of roast beef and apple pie,” he wrote, “all socialist utopias flounder.”)

I’m beginning to think that “Where’s America’s learning curve?” may well be the 2011 version of “Why is there no socialism in America?” By today’s standards—certainly, by Germany’s standards—socialism now means a more social capitalism, in which workers have greater say over corporate decisions and a social democratic party defends what by American standards is a generous welfare state. In Germany and elsewhere, social democrats had been scaling back that state during the market-mania years of 1989-2007, but the massive market failure has returned some of these parties to first principles (or at least, closer to such principles, as the push to raise the living standards of Germany’s retail and service-sector workers makes clear).

America, I hardly need remind you, not only doesn’t have a very social capitalism, but it’s been growing less social and more inegalitarian for about the last 30 years. That’s been a boon worth billions to the top 1 percent, who have managed, with help from politicians of both parties, to rouse the anti-statist instincts of enough Americans to ensure that the state neither regulates nor compensates for the shortcomings of private capital. Roast beef and apple pie clearly ain’t the reason –- most Americans have seen their living standards stagnate or shrink over the past decade –- but thanks to the financial clout of business, spurring Republican pols to action and Democratic pols to timidity, a robust defense of the need for government has been nowhere in evidence in our political class, save from the very fringes. Today, with the positive response that the public has given to the message of Occupy Wall Street, Americans’ learning curve may be beginning to bend upward, but it still has a long way to go.

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