UK readers: We are delighted to announce a Persuasion panel discussion in collaboration with the Equiano Project on the topic: “Where will (and should) the future of the centre-left lie?”
It will be at the Sekforde in London on Monday 3 July at 6:30pm. For more information, and to reserve your (free!) ticket, click here: https://www.eventbrite.com/e/where-will-and-should-the-future-of-the-centre-left-lie-tickets-661076135517
There will be drinks and open discussion afterwards so please do join us!
Michael Lind is a writer and professor of the practice at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin. He is the co-founder of the think tank New America and the author of The New Class War: Saving Democracy From the Managerial Elite and, most recently, Hell to Pay: How the Suppression of Wages is Destroying America.
In this week’s conversation, Yascha Mounk and Michael Lind discuss whether one’s stances towards free trade, taxation, and workers’ rights are still a reliable predictor of voters’ broader political identity; why Lind, though he supports many economically progressive policies, is often classed as a conservative; and whether efforts to rebuild labor power and reinvigorate national industrial policy will succeed in improving the economy for ordinary people.
The views expressed are those of the speakers, not those of Persuasion. The transcript and conversation have been condensed and lightly edited for clarity.
Yascha Mounk: I've been reading your last two books and thinking about your work more broadly. And in a weird kind of way, it feels like the ideological moment is moving towards you, which is to say that you have a very long time been a kind of a radical centrist, a bit of an economic populist; certainly socially liberal, but with a long-standing instinct towards criticizing a certain kind of sociocultural elite.
Do you feel like that combination of ideas is coming to have a new lease on life in American politics at the moment?
Michael Lind: When I first came onto the scene in the 1980s, there were great debates within the Democrats and the Republicans and one debate was over neoliberalism. That is, would you deregulate everything, trade, immigration and regulated industries and then redistribute money, often cash, to the so-called losers? That was the neoliberal model, and it was a new model. And then there were defenders, like me, of the older mid-century model, which took the form of the New Deal in the U.S. but took the form of social democracy, Christian democracy, “wet” Tories in Britain, which said, “No, we have a mixed economy, and organized labor has a role to play.” And my side lost for 30 years or so from the 1990s up, really, until the 2020s, as the ice started to break with Bernie Sanders and Donald Trump in 2016.
There's a French proverb that I heard some years ago: “There are not 36 ways to do a thing.” So there are some basic decisions you have to make about how you organize a modern industrial economy and modern industrial democracy. Do you regulate trade and immigration in the national interest or do you not? Is there a role for organized labor in collective bargaining in setting wages and benefits or is there not? Basically, I argue, in my new book, Hell To Pay: How the Suppression of Wages is Destroying America, that we've gone from the mid-century model of a high wage social insurance system, in which, if you work 40 hours a week, you not only made enough money that you didn't need means-tested welfare, but you also could pay, with payroll taxes, for adequate social insurance; to the post-1990s system, which I call the “low wage, high welfare” model. It’s high welfare—the welfare is not necessarily generous; the US has a very miserly welfare system—because you have millions and millions of workers in the United States, also in Britain and some other European countries now, who, even if they work full time, can't make enough to live on from their market wages. And so they're dependent on not universal social democratic insurance, or public goods, but on specifically means-tested programs for this group called the “working poor.” And in the middle of the 20th century, for the most part, if you worked, you were not poor. So we tried the neoliberal globalist approach—and its sibling, the low wage, high welfare, high redistribution system—and it just didn't work. I'm glad I've lived long enough to see people come around to the alternative. It's like the old joke by Churchill before the U.S. entered World War II—the Americans can be counted on to do the right thing as soon as they've exhausted the alternatives.
Mounk: I'm glad that you get a little bit of enjoyment out of this intellectual moment. I mostly don't. Perhaps we can discuss that later on. But tell me a little bit more about the ideas in this latest book. How is it that wages are being artificially suppressed today? And what can we do to make wages rise?
Lind: There are a number of methods of increasing or decreasing the bargaining power of workers with employers with regard to their wages and benefits. The most important is organized labor; if workers can pool their bargaining power, then they get better results. In the United States, there's a union membership premium of 15% or so, in terms of wages, as a rule, even with individual workers. The bargaining power is determined by things like contracts. For example, if you have a non-compete clause in your contract, and you're working for one company and then you quit, and then the non-compete clause says your former employer can sue you if you go to work in another company in the same field or in a company in the same field within 1000 miles. These are perfectly legal in much of the United States. And the opposite of that is a no-poaching agreement, which is a secret blacklist shared by employers who agree not to hire each other's former employees in order to prevent any employees from forcing employers to bid for their services. Finally, there are labor market conditions: employers want a buyer’s market in labor and a seller's market in jobs. They want more people competing for jobs than there are jobs. Logically, workers want a seller's market in labor and a buyer’s market in jobs. And if you look at things from immigration policy, to welfare policy and unemployment insurance, the shorter the period of unemployment insurance in the welfare state, the sooner you are forced to go back to work on terms that are less than you would prefer if you could hold out for a longer period of time. Even entitlement reform is favored by employers, because it increases the labor force if you compel people to work until their late 60s or their late 70s.
Mounk: So if we want to get wages growing again—this is something that for various reasons we agree is important—how can we do that? Can we really reinvent a moment in the United States where trade unions were as important as they were when most people were in manufacturing, going to a factory at the same time for the same shift, and where the ability to coordinate was very different from what it is like today if you're in, say, the gig economy. Can we actually recreate that world of powerful trade unions and other kinds of bargaining mechanisms?
I agree with you, of course, that many of those non-competes are mistaken, and there is now some legislative movement towards making it much harder to enforce non-competes, which I think is an excellent thing. But it's not clear how big a difference that is going to make. Is that a realistic path to making sure that the wages of the average American or of the working poor really grow more significantly in the coming years?
Lind: Well, I think it is, but we have to understand the history of the mid-20th century. The U.S. was a developmental state, to use the political science term, from the Civil War up until the Great Depression. That is, the government worked closely to sponsor the development of American industry—in everything from infrastructure (like railroads) to tariffs, the U.S. had this kind of East Asian, pro-industry economy. It was a kind of industrial policy that included business and government. It excluded labor and farmers. And so then the New Deal can be seen as a way to bring labor into this already existing system. So the first difference, I argued, between that period and today is that the U.S.—and to some degree, Western Europe—needs to reindustrialize. It needs to onshore some supply chains that are strategic and have been lost. And that can only come about through government industrial policy. And the means will include all kinds of things—tariffs, local content regulations, subsidies like those in the CHIPS Act. And it can be done poorly or well, but it needs to be done.
I argue that we need to simultaneously rebuild worker bargaining power as part of rebuilding this productive economy. It's not something where you have a bunch of flourishing businesses, and then labor shows up and says “OK, we want a piece of the action.” You have to rebuild them both simultaneously. But what that means is that there is no one-size-fits-all policy. Industrial policy is sectoral policy. If you want to reshore manufacturing of chemical precursors to drugs, that takes one set of policies, and a different workforce appropriate to it, than there is if you want to improve the productivity of fast food restaurants and the pay of their workers. So you have a sectoral industrial policy combined with a sectoral labor policy. And they can take different forms in some industries, like mass manufacturing and infrastructure; the kind of national sectoral bargaining that still exists in Europe, where multiple employers in a field negotiate with all of the representatives of workers in a field. That would be appropriate in the United States. And we actually had this in the obscure Railway Labor Act, which covers train, transit and airline operators who are not part of the main National Labor Relations Act of the 1930s. In other cases, like a lot of service sector professions, where it's very difficult to unionize the workers, you can have wage boards. This was a British invention of a century ago, and it spread to all English-speaking countries, including the U.S. in some cities and states. The government just appoints representatives of labor representatives of that industry, maybe consumer representatives, and you just set industry-specific minimum wages and benefits, so there's no need to belong to a union at all. But you're still represented.
There's no single magic bullet. But if we're going to get beyond both anti-labor, neoliberalism, and neoliberal globalism—which is really unilateral liberalism, because if your trading partner is cheating, or is state capitalist like China, it’s not really free trade but one-way free trade)—I think we need to combine these two simultaneously.
Yascha Mounk: The economic dimension used to determine who was on the Left and who was on the Right. You once would have been able, with some degree of accuracy, to guess who somebody's voting for by asking them something like, would you rather have a bigger welfare state and more taxes or a smaller welfare state and less taxes? Today, it seems to me that culture is at the forefront of our politics. And, really, what drives you is the economic dimension and the sort of epiphenomenal policy position that that pushes you to embrace becomes the foundation of your perceived political orientation in a system that says what's primary is culture.
Do you see the set of arguments you're making about the economy finding a political home in the United States? Or do you think they will continue to be as homeless as they have been in the last decades?
Lind: It's certainly the case that I have been coded as a conservative. I would have been coded as a progressive in 2010. In 1990, I would have been on the Left. I was a Cold War liberal but Cold War liberals were pro-labor, pro-union, and so on. I'm simply setting forth a position that I think is coherent. Who decides at any given moment what is Left and what is Right? All the way up until 2000, immigration restriction was pushed by the AFL-CIO and by the labor movement because of worries about competition and wage suppression. The people who were making the arguments about open borders and humanitarianism and so on were Cato Institute libertarians and the representatives of American agribusiness. After 2000, suddenly, what had been the right-wing libertarian position on immigration was now the progressive immigration position. And if you criticized it, you were a bigot, a nativist and a fascist. The same is true on trade. The trade skeptics are now mostly in the Republican Party. They were mostly in the Democratic Party—you had people like Dick Gephardt, who were economic nationalists.
And this is where I disagree with a lot of people—I think that the U.S. and maybe some Western European democracies, have effectively been post-democratic since the 1970s. And this is the theme of my book The New Class War, which is that the three organizations that gave real substantive power to working class people were these mass membership organizations: the political parties, which were federations of local clubs; the trade unions; and the churches and religious institutions, which were much more important then. What happened by 2000 is that these organizations simply disintegrated. And the only connection that most ordinary citizens have with the government is maybe voting in a primary or general election in the United States in a single member or single party district where the party is going to win no matter what—it's gonna be all Democrats or all Republicans. And then they have no say in terms of lobbying in between elections. We’ve moved to what I call “neoliberal technocracy” in the ‘90s and 2000s. Various rebellions—Bernie Sanders on the Left, and Trump's voters (not Trump himself, he's just a charlatan and a demagogue)—were a backlash against the closure within this kind of technocratic system. In Italy, of course, we see this illustrated better than anywhere else in the Western world, because you had Berlusconi long before you had Trump, and, at the same time, you literally have technocratic governments, run by technocratic mandarins. And you get this kind of back and forth between populist demagogy and technocracy.
But I do not see these mass membership organizations being reconstituted spontaneously anytime soon. So the parties will continue to be dominated by their very upscale, college-educated primary electorates who are driven much more by post-material culture war issues than they are by material concerns and certainly not by the material concerns of working class majorities. So then the question becomes, how do you get reform in a system like that? And we have examples, both from American history and from abroad: you can change the elite consensus within both parties without this being the result of elections. Nobody voted in the 1970s and the 1980s to allow the minimum wage to be eroded by inflation. The public was opposed to NAFTA. It got pushed through anyway. The public has been consistently ani-interventionist for my entire lifetime. They want less foreign aid, less military intervention abroad, fewer alliances. So the most successful policy elites in the neoliberal period from the ‘90s to the present were libertarians in economics, whose ideas in watered-down form were adopted by Clinton Democrats and Reagan Republicans and neoconservatives. There was no voter pressure or grassroots pressure bringing about either the U.S. hegemony strategy or deregulatory neoliberalism.
If we move away from those two schools of thought, it will probably be as a result of changing the minds of members of the elite. And it has to be members of the elite of both parties. It has to be a bipartisan consensus.
Mounk: Perhaps you can just explain to listeners what the new class war is, in your mind. How is it that the managerial elite is threatening democracy and why does that constitute a new class war? Because it seems to me, just to make the link explicit, that for the changes you're hoping for to happen, that managerial elite needs to either become a lot less powerful or have a very radical change in its understanding of its self-interests.
Lind: Well, I follow James Burnham's analysis in The Managerial Revolution that he published during World War II. And he built on Adolf Berle and Gardiner Means in their book on managerial capitalism succeeding proprietor capitalism (or bourgeois capitalism) by the 1920s and ‘30s. Essentially, with Burnham—and with people who thought along similar lines independently, in some cases, like John Kenneth Galbraith, who called it the technostructure—all of these organizations, government, nonprofit, and for profit, that had been kind of small stake and run by the founding capitalist or small government agencies and local charities, became immensely bureaucratized. And largely because of the wealth of the Industrial Revolution. The small charity becomes the Ford and Rockefeller Foundation; the owner-operated company becomes this global, world-straddling behemoth. A majority of Americans in the private sector work for a company with more than 500 people. This is really an age of giantism.
The managerial elite, the people who end up running these public and private and for profit bureaucracies (you and I are part of this class—the college-educated overclass, as I call it) tend to be very similar. You have to have a college diploma, often an advanced degree, to advance. Power in the managerial society (and this is where the Marxists get angry with me) is not money, per se. It is the control of a large bureaucracy. And there tends to be a merger of these elites, socially. They go to the same schools, their kids attend the same private schools, they vacation at the same watering holes, and they watch the same cable TV shows and talk about them on Twitter. It’s a kind of epistemic closure. And if all members of a powerful elite pursue their individual interests simultaneously, it looks like a coordinated class interest.
What do you do when you have this kind of bureaucratized managerial society? There have been three answers. One is, you just go back to agrarianism or small business or something like that; you break it up and we go back to a lot of shopkeepers. Well, that would be a disaster because managerial capitalism is an improvement over bourgeois capitalism, and managerial society is more efficient and better for ordinary people than its predecessor was. So we're not going to get rid of managers in society. The answer of Burnham, who later became very right-wing and a co-founder of William F. Buckley Jr.'s National Review, and of John Kenneth Galbraith, who was Mr. Liberal, was “countervailing power,” a term used by Galbraith. You don't break up the managerial elite, but you have outside organizations, and they're accountable to them.
Mounk: Let me ask you another question. You alluded to the fact that we have a kind of difference about populism. I want to locate what the difference is and debate it for a moment. There doesn't seem to me to be a difference in our assessment of at least some of the populists. Part of the disagreement perhaps is that you think that there is less to save in our political system than I do, because it had effectively become, in your words, a neoliberal technocracy for a long time.
Now, I want to hear from you how worried are you about populism not as an economic proposition, not as in the kinds of policies that you're pushing for, but as a phenomenon of politicians who are undermining some of the key institutional norms and rules, as I would see them, to sustain free and fair elections. To what extent do you think we should be worried about that and is that where you locate our disagreement about populism?
Lind: Well, let me say that I don't consider myself a populist. I see populism and technocracy as equal and opposed evils. What I mean by populism is a charismatic Bonapartist or Caesarist figure claiming to represent the undifferentiated masses against a corrupt establishment, and that can be the left, the right, or the center. I consider myself a pluralist. And I've written about this idea of pluralism, about intermediate institutions, the absence of which lead to this doom loop between technocracy and populism. Of course, I'm concerned about populism. I'm a fifth generation Texan, a Southerner—the South, between Reconstruction and the civil rights revolution, had the sort of system I think that we're moving into now, where you have this very nepotistic, closed-off elite, and periodically there would be rebellions backed by alienated voters (when they could vote—half of the whites as well as all of the blacks in the South were disenfranchised before the 1960s), but they rally behind these figures, almost all of whom turned out to be obnoxious blowhards like Donald Trump. And most of them either sold out to the existing establishment or created their own corrupt personal patronage schemes, like Huey Long and the Long family in Louisiana. They created their own dynasties. But they almost always betrayed the people looking to them as saviors, and, in doing so, they trashed norms left and right. That was part of the appeal to their alienated constituents.
Mounk: Last question. You are somebody who has a great sense of American history and you are trying to push for one kind of resolution to the current standoff. But the more I reflect on the changes of the last ten years, the more I wonder whether we have the answer to what this current political epoch is going to look like for another 20 or 30 years, in the clash between the managerial elite, in the way that you're talking about it as the beating heart of the Democratic Party, and then the populist authoritarian counter reaction to it in the form of something like the MAGA movement and Trumpism.
Isn't the simplest assumption simply that we've basically stopped being in a moment of transition that we were in between 2016 and 2020-2021, and we're starting to see the outline of what the basic lines of competition in American politics are going to be for the foreseeable future?
Lind: Yes, I'm an optimist of the will and a pessimist of the intellect. I think we're now in a kind of classic Latin American politics. I don't mean that in any culturally bigoted way, but just institutionally—Latin America, like the South, with this very inegalitarian society and with the establishment versus the outsider populists. And I do worry. It's not Ron DeSantis, who I think is a fairly conventional Tea Party Republican who’s just waging a culture war. But if we don't rebuild institutions that incorporate alienated working class people—increasingly high school educated African Americans and Hispanics, who are leaking over into the populist right (we're getting an educational polarization and racial depolarization)—then you get someone who knows what he's doing, like Huey Long, who, alone amongst southern populists, was a truly competent figure. You get Juan Perón, as in Argentina. You get Getúlio Vargas. And the thing is, these figures may do good things. If you look at Perón and Vargas, they did a lot of the stuff that was done by the New Deal in the U.S., only they did pro-worker reforms with death squads and with illegality.
At the end of the day, put not your trust in princes. You have to create a system in which there are intermediate organizations that represent ordinary people between elections, not just mobilizing to get people to vote and then forgetting about them. And the theme of all of my work, but particularly The New Class War and Hell to Pay, is that we have to put negotiation and consensus back at the center of politics and democracy. I used to ask my students, when I taught in universities, what's the point of democracy? Some say to achieve social justice or to express the will of the majority. My answer, that I tried to persuade them of, was to avert civil war. It's so that when one side loses, it doesn't feel it’s lost everything, that they’re still valued members of society. And it's actually to promote consensus and the consensus may not take the form of 51% majority opinion versus 49%. It may arise from all kinds of complex negotiations. Maybe this sounds kind of naive. But, on the other hand, if we were having this conversation in the ‘50s, or ‘60s, this would have just seem banal—of course politics is about consensus. And it shows you how much America has changed that this is kind of an outlandish idea in the 2020s.
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