Business, not public, driving nation rightward

 The political realignment of the Reagan years was a realignment of business interests and not of voter sentiment.  So argued Thomas Ferguson and Joel Rogers, in their 1986 book, Right Turn: the Decline of the Democrats and the Future of American Politics, a book as enlightening now as it was when it was published 25 years ago, because the situation they describe has not changed.

Public opinion polls in the 1980s showed that a majority of voters favored Social Security and Medicare, gave full employment a higher priority than balanced budgets or lower taxes, believed workers have a right to join labor unions, and had no enthusiasm for getting bogged down in foreign wars—as they still do.

How, then, did Ferguson and Rogers explain Ronald Reagan’s landslide victories in 1980 and 1984?  They said this was a reflection of the unpopularity of the Democrats than allegiance to the Republicans.  Jimmy Carter was rejected because he was unable to deal with stagflation and rising oil prices, and because he supported the tight-money program of Federal Reserve chair Paul Volcker, which brought inflation under control by measure Volcker knew would casue a recession.  Walter Mondale was rejected because his only substantive campaign promise was to raise taxes.

If voter sentiment did not change, what caused the Reagan revolution?  Ferguson and Rogers said business interests realigned as a result of rising oil prices and increased international economic competition in the 1970s.

One consequence was a conflict of interest between the oil industry and manufacturing industry, leading to a majority of oil men shifting their allegiance from the Democratic to the Republican party.  Another was a slowing of U.S. economic growth, resulting in a hardening of corporate attitudes toward taxes, labor unions, environmental and health regulation.  In an era when U.S. economic supremacy was unquestioned, these costs could be passed on to consumers; in an era of intensified global competition, this was not possible.  The result of the Reagan revolution and the pro-corporate movement that followed was that the corporate elite received almost all the benefits of what economic growth there was.

Ferguson and Rogers dismiss the idea that the Reagan administration reflected a change in economic philosophy.  If you examine the Reagan policies in detail, they wrote, they consist of payoffs to constituencies, not implementation of a philosophy.  The Star Wars defense plan was a payoff to the aerospace and computer-electionics industries.

The Democrats were unable to challenge this because their party was (as it still is) beholden to Wall Street.  Bankers and financiers fear inflation above all else, because it reduces the value of their assets, and so favor balanced budgets and spending restraint.  This is why Carter supported Volcker and Mondale advocated a tax increase to balance the federal budget, and why Clinton and Obama gave priority to fiscal probity, and why Democrats have a better overall record than Republicans as budget balancers.

Ferguson and Rogers saw politics as primarily a conflict of business interests, because no candidate can run for office without “investment” by some important economic interest.  This doesn’t mean that policies is meaningless.  Candidates differ over such issues as free trade vs. protectionism, economic growth vs. low inflation, balanced budgets vs. low taxes, industrial policy vs. laissez-faire.  These are all important issues, but according to Rogers and Ferguson, questions on which corporate America has a consensus don’t get on the public agenda.

This is obvious, they wrote, when you look at the sources of campaign funds for the various candidates, the affiliations of important party officials and candidates’ campaign committees, and the backgrounds of government appointees.  They are drawn from Wall Street law firms and corporate boards of directors.  This is true of both parties, not just the Republicans.  Democrats draw more appointees for their administrations and campaign organizations from Goldman Sachs and Wall Street law firms than from the ranks of the NAACP, National Organization for Women or the National Education Association.

The major exception to this was the emergence of organized labor as an important part of the New Deal coalition, Ferguson and Rogers wrote.  Labor did not dominate the New Deal, but its voice was equal to that of the oil industry, Wall Street and other business interests.  The influence of organized labor was on the wane in the 1980s, and has continued to decline.

They said the reason for the AFL-CIO’s decline is not just the unrelenting attacks by labor-intensive industry, but the failure of George Meany and other AFL-CIO leaders in the 1960s and 1970s to align with their natural allies, the civil rights movement, women’s movement and peace movement.  Instead the AFL-CIO offset the decline in membership dues by accepting subsidies from the government for supporting anti-Communist activities abroad.

Civil rights organization became dependent on foundation grants, and was slowly transformed from a protest movement to a patronage network.   They mitigated grievances of poor people and minority groups, and provided paths of upward mobility for their leaders, but did not press for fundamental social and political change.

Ferguson and Rogers said the only important civil rights organization that refused to be co-opted was ACORN (Association of Community Organizations for Reform Now), which was struggling when they wrote, and which was finally destroyed during the Obama administration by right-wing slanders and liberal indifference.

Right Turn‘s authors thought the prospect for change was bleak.  The only way to bring about change would have been to mobilize poor people, working people and minority groups, which the Republican Party actively was seeking to prevent and the Democratic Party did not promote because it would have upset the party’s internal balance of power.  Barack Obama in 2008 did in fact mobilize poor people, working people and minority groups, but his administration has offered them nothing except excuses and the claim to be the lesser evil.

I wish I had read this book when it first came out.  I would been less naive about politics than I was.  I first became aware of Thomas Ferguson when I saw some interviews he gave to The Real News Network on YouTube.  This prompted me to obtain a copy of his 1995 collection of articles, The Investment Theory of Political Parties and the Logic of Money-Driven Political Systems, which I found equally enlightening.

I think Ferguson’s ideas about money and politics are an important truth and a neglected truth, although not necessarily the whole truth.  No single theory is.  Regional, ethnic and class conflict, and even conflicts of ideas, also drive American politics, although frequently manipulated or submerged in conflicts of corporate interests.

Click on Money and the Midterms: Are the Parties Over? Interview With Thomas Ferguson for his analysis of the 2010 elections.

Click on Conversation With Thomas Ferguson: How Money Drives Politics for Ferguson’s analysis of the current political situation.

Click on Legislators Never Bowl Alone: Big Money, Mass Media and the Polarization of Congress PDF for Ferguson’s latest academic paper, presented last April.

Click on The investment theory of politics, Tom Ferguson on money and politics and Tom Ferguson on the debt ceiling for earlier posts and video links on Ferguson’s ideas.

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2 Responses to “Business, not public, driving nation rightward”

  1. Ben Hoffman Says:

    Republicans appear to be more “beholden to Wall St.” than the Democrats since they’ve fought all efforts to rein in the abuses.


  2. philebersole Says:

    I think you phrase things well. Democrats are beholden to Wall Street; Republicans are even more beholden.


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