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The Pluralist Alternative To Neoliberalism

Thanks to rising inequality, sub-replacement fertility, and growing anti-system populism, technological civilization in the United States and worldwide is experiencing the latest of several historic crises that have occurred since the transition from agrarian to industrial economies that began in Britain, Western Europe, and the Northern United States two centuries ago. The central issue from the 1800s until the 2000s has been how to provide decent lives for the majority of people in machine-based societies who are proletarians in the Roman sense—wage workers who own little or no income-generating property and cannot survive without selling their labor to employers.

Four solutions to the challenges of proletarianization have been offered since around 1800: producerism (sometimes called distributism), liberalism, collectivism (of which socialism is one version), and pluralism, which takes the form of corporatism in the economic realm. 

The producerist ideal is a society with a majority of small, self-employed, self-sufficient producers.

The liberal ideal is a borderless world of autonomous individuals free to engage in contracts with one another to satisfy their economic and other desires.

The collectivist ideal, in both its socialist and nonsocialist versions, is a centrally planned society ruled by an elite of wise, altruistic technocrats.

Moral individualism is shared by producerism, liberalism, and collectivism alike.  All three view the individual and the state—a minimal state, in the case of liberalism—as the basis of society. The family and intermediate institutions like religious groups and trade unions are considered as obstacles to personal fulfilment or the free market or the state interest, or at best as voluntary clubs to be tolerated as long as they are weak.

In contrast, pluralism is based on a communitarian anthropology.  In the past two centuries, pluralism has come in both religious and secular varieties—Catholic and Dutch Calvinist social thought, secular and republican French solidarist thought, English guild socialism, Progressive-era American associationalism, and some schools of trade unionism.  While their metaphysics differ, all of these strains of pluralism share Aristotle’s belief that humans are social animals.  All agree that membership and participation in the family, community, trade, and neighborhood, far from oppressing a (nonexistent) pre-social “self,” help to define and constitute the personality.

In practice this moral communitarianism leads to a view of the ideal society not as a community of individuals but as a community of communities, including families, religious congregations, occupational associations, and other groups.  The idea of the sovereign, omnicompetent territorial state is rejected by secular and religious pluralists alike, in favor of the view that the state’s direct authority should be is limited in scope.  The pluralist state rules in a few areas but reigns over self-organized and self-governed communities in others, ceding large areas of policymaking to them by the logic of what the Catholic church calls “subsidiarity” and what secular pluralists have called “social federalism.”

Of the four visions of society, the producerist or distributist ideal of a society of small farmers and mechanics and shopkeepers is anachronistic in an industrialized economy. Most modern nation-states subsidize family farmers and bestow legal preferences on small businesses. But technological productivity growth allows a few percent of the population to grow all of the food that is needed by the rest, while manufacturing employment is around 10 to 20 percent in every major industrial country. Only 10 percent of Americans are self-employed, and this small minority employs only 20 percent of the nonfarm workforce. More than half of Americans work for corporations with more than five hundred employees. Rather than focus on the one-tenth of Americans who are self-employed, we should try to make life tolerable for the vast majority of wage earners who must work for someone else.

Given that producerism is irrelevant, except at the margins, there remain three ways to structure modern industrialized societies: liberalism, collectivism, and pluralism. All of these can “work,” in the sense that at least some versions of liberal, collectivist, and pluralist societies can adequately feed, clothe, and house the wage-earning majority of the population in modern conditions. Even communist industrial regimes, though inefficient compared to capitalist rivals, are far more productive and provide higher standards of living than the agrarian regimes they replaced. But only in a pluralist regime can workers and their families enjoy economic power and a degree of economic and social independence, rather than merely being taken care of like livestock by their social superiors.

The first attempts at a liberal organization of industrial society in Western Europe and North America failed to provide adequately for most urban wage workers. Following class conflicts in the first half of the twentieth century, industrial-capitalist liberalism was replaced by 1950 in most Western countries by a version of pluralism, often supported by powerful religious communities like the Catholic Church. Large managerial capitalist firms were compelled to engage in collective bargaining with labor unions, with nonwage social benefits provided either by employers, unions, or the welfare state. Versions of this pluralist consensus, sometimes called “social corporatism,” underpinned the “thirty golden years” of postwar managerial capitalism in the United States, Europe, and East Asia.

Since the 1970s, postwar pluralism has been dismantled and replaced in its former Western homelands by neoliberalism. Neoliberalism is not simply generic “capitalism,” nor is it a return to the laissez-faire liberalism of the late nineteenth and early twentieth centuries in Britain and the United States.

Like early liberals in the United States and elsewhere, who called on government to use the military to crush striking workers, modern neoliberalism seeks to use the state to destroy the bargaining power of wage-earners with employers, by a variety of methods. Unions are no longer outlawed and treated as criminal conspiracies. More subtle policies are used to reduce the bargaining power of the working class. The most important method is the weakening and destruction by corporations and the government of private sector labor unions, which now include only 6 percent of the U.S. workforce. Other techniques used by employers in the neoliberal class war against American workers include replacing full-time workers with lower-paid contractors (outsourcing), shifting the production of goods and services to low-wage workers with less bargaining power in other countries (offshoring), or importing immigrants of various kinds—indentured-servant “guest workers,” illegal and legal immigrants—whom companies can use to replace citizen-workers.

Needless to say, the very success of neoliberal managerial capitalists in using anti-labor policies and globalization and immigration policies to weaken worker bargaining power, drive down wages, and curtail employer benefits creates a social crisis.  Who will take care of the workers and their families if wages and benefits are too low for them to survive? 

Under neoliberalism the answer is greater tax-based welfare state redistribution to rescue underpaid workers and their children and elderly relatives—in the absence, however, of organized labor power. Needless to say, the promise by the state that it will take care of workers who are not a paid a living wage, much less a family wage, enables employers to adopt wage-lowering strategies.

Neoliberalism is an anti-labor synthesis of the two models of liberalism and collectivism. It is a version of what Hilaire Belloc described a century ago, during the first era of industrial liberalism, as “the servile state.” In the neoliberal servile state, the wage worker must serve two authorities—the employer and the welfare state. The employer pays wages too low for a worker to live on, much less support a family, so that the worker, given the inadequacy of private charity, is forced to depend on various government welfare programs. But as a condition of receiving public welfare, the government imposes work requirements, forcing the hapless worker to take any job available, however bad, for any wage, however inadequate. 

In neoliberalism, then, the employer and the state, far from being at odds, are partners, jointly controlling the wage earner, who has little or no bargaining power as an individual either with employers or with welfare-providing bureaucrats, notwithstanding the right to vote for a few politicians in elections every few years. Under this regime of dual domination by the managerial bureaucracies in the private and public sector, workers can survive on a combination of the market wage paid by the employer and the “social wage” or government benefits that top up the market wage. But while workers can survive, they cannot flourish, and they often find themselves at the mercy of private corporate bureaucracies and public welfare state bureaucracies alike.

And it gets worse.  Modern managerial bureaucracies are necessary and useful within their proper spheres, in the private, public, and nonprofit sectors. But all bureaucracies tend to seek more resources and more power. The result is a kind of bureaucratic imperialism, in which the personnel of managerial corporations, managerial government agencies, and managerial nonprofits seek to expand their institutional authority and institutional resources by invading and colonizing what were formerly the realms of the family and the religious or local community.

For example, left-neoliberals want publicly funded daycare centers paid for by taxes and staffed by government employees to replace at-home care of children by parents; right-neoliberals, in contrast, prefer for-profit commercial day-care centers paid for by fees. Both left-neoliberals and right-neoliberals agree that young children should be raised by strangers, rather than their parents and other relatives, to enable all parents of young children to join the ranks of the workforce, laboring outside of the home in return for wages and work-based welfare benefits.

In the United States and elsewhere, there is increasing evidence that the overstaffed, ever-expanding managerial elite has mutated into a parasitic caste that is destroying its host, the wage-earning national majority. The deindustrialization of the Midwest, accompanied by the collapse of labor unions and other community institutions, is producing “deaths of despair” and social breakdown among many non-Hispanic whites. A similar process occurred decades earlier in largely African American inner cities when good jobs vanished. Growing numbers of surplus college graduates, credentialled in numbers far in excess of the limited number of good professional and managerial jobs that exist, live in fear of underemployment and proletarianization. The fear of these marginal members of the overclass that they will lose their education-based status makes them natural recruits for extreme versions of identity politics, usually but not always on the left. 

The decline of good jobs with good benefits caused by the managerial elite’s offensive against working-class bargaining power helps to explain the failure of family formation among many working-class Americans. In part it can also explain the declining lifetime fertility of the managerial and professional elite, who postpone marriage and family life until they have first acquired the increasingly expensive credentials that are passports into the few remaining sectors that offer good jobs.

This knot of social pathologies is not simply an American or Western phenomenon, as the example of East Asia shows.  East Asian fertility is the lowest in the world, partly as a response to “workerism” or the expectation that family life will be sacrificed to the organizational imperatives of the employer. Even in Leninist China, the regime of Xi Jinping is taking steps to encourage childbirth and prevent the kind of run-away credential arms race that is ravaging Western societies—ironically, given that China pioneered the exam-based Confucian meritocracy.

Twenty-first century neoliberalism—in which employers are free to drive down the wages of workers who lack bargaining power, with the public welfare state stepping in to clean up the social messes that result, while sending the bill to the taxpayers—does not appear to be a sustainable form of organization for an advanced industrial and urban society, in either its American or Chinese forms.  The crisis of the neoliberal social order is not a “problem” that can be “fixed” by one or a few easy solutions—a slightly higher minimum wage here, more family subsidies there. The worldwide crisis of this particular historic version of industrial society is the outcome of a power struggle in the last half century that has shifted too much economic and social power upward from wage-earning national majorities to managers, professionals and rentiers.

What is needed is a downward and outward shift away from the managerial elite to the majority working class of power of all kinds—economic, cultural and political. Two reforms in particular are essential:  increasing the bargaining power of workers vis-à-vis employers, and resisting and rolling back the bureaucratization of services best provided by families and intimate communities rather than by private, public, or nonprofit bureaucracies.

The power of individual workers to bargain for higher wages and better conditions can be helped by tight labor markets, as we have seen in the rare occasions when labor markets have been tight in the last half century. That being the case, those who seek to strengthen working-class bargaining power must resist efforts by employer lobbies and the experts and lobbyists whom they fund to increase what Marx called “the reserve army of labor” available to employers. Importing excessive numbers of working-age immigrants, pressuring all homemakers into the paid workforce, or delaying the retirement age and cutting Social Security and Medicare benefits are three policies to undermine worker wages and bargaining power that are favored by the U.S. Chamber of Commerce and neoliberal ideologues of the left, right, and center.

Tight labor markets are a necessary but insufficient condition for a resurgence of worker bargaining power.  Collective bargaining is necessary as well. It has always been absurd to claim that individual workers can bargain with employers, large or small, on equal terms. Workers must be able to pool their efforts in labor cartels that can bargain with employers to set standard wages and benefits for all workers.  

Collective bargaining can take various forms, including traditional unions, codetermination, wage boards and sector-wide bargaining in particular industries or occupations. Whatever form it takes, the goal must be to transfer wage- and benefit-setting from the “labor market”—which in practice is not a free market but a de facto employers’ cartel—to negotiations between representatives of labor and employers, under government oversight. And while membership in particular labor organizations need not be compulsory, to prevent free riding the standards set by collective bargaining must be imposed by law on all employers and workers in an economic sector.

The pluralist agenda for restoring working class power should not end with collective bargaining in setting wages and benefits. It should include rolling back the outsourcing of intimate functions, like childcare and some kinds of elder care, that are naturally done better by families or religious and communal organizations rather than by the paid staff of bureaucratic government agencies or corporations. Reducing the parasite load of bureaucracy in modern managerial America might also include promoting alternatives to the public monopoly of K–12 education, such as public funding for religious and other private schools and home schooling. Large, centralized bureaucracies can be effective at organizing public utilities and military operations. They are not well-adapted to caring for toddlers or passing on venerable cultural traditions and habits of virtue to the next generation.

It goes without saying that the twenty-first-century pluralist program I’ve suggested does not map onto the ideologies of conventional American “progressivism” and “conservatism.” The left is pro-union and anti-church, the right is pro-church and (with few exceptions) anti-union. Both the feminist Left and the corporate libertarian Right want all mothers of infants and toddlers to be laboring in the warehouse or the office cubicle, not caring for their children at home. It is a benefit, not a fault, of pluralism that it has the potential to scramble inherited ideological and partisan allegiances.

In the middle of the twentieth century, pluralist reforms rescued Western societies from the social breakdown that early industrial liberal capitalism was causing.  In the middle of the twenty-first century, a new democratic pluralism might be able to arrest the social breakdown caused by the alliance of neoliberal managerial capitalism with the collectivist state. 

This article is an American Affairs online exclusive, published December 20, 2021.

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