a new vision of capitalism -- 3/7/24

Today's encore selection -- from The Middle Out by Michael Tomasky. In his 2022 book, The Middle Out, political journalist Michael Tomasky charts an alternative version of capitalism with the objective of broader prosperity. As part of that, he examines the history of political and economic thought since World War II:
"It should be said that none of [the U.S.] growth and prosper­ity [in the years following World War II] was inevitable. Early during World War II, as it became clear, in the United States and the U.K. in particular, that the Allies were likely to win the war eventually, economic and political minds turned toward the postwar economy. They did so with considerable trepidation. To appreciate this, we have to imagine the wartime economy, barely comprehen­sible to us today in our age of unquenchable consumerism. This was a time when millions of people were doing with­out. Meat, sugar, rubber, gasoline, and many other goods were rationed. Governments issued pamphlets to house­wives instructing them on how to squeeze everything they could out of the groceries they were allowed to buy. There was a Home Front Pledge that even Eleanor Roosevelt took: 'I will pay no more than top legal prices. I will accept no rationed goods without giving up ration points.' As the end of the war approached, some critics observed that the upper classes were growing a bit weary of all this. The historian Isser Woloch wrote that in the summer of 1944, in his reg­ular newspaper column, George Orwell noted that certain cars on the British rail system were once again being desig­nated first-class, a distinction that had disappeared after the war's onset, and that some gated private parks in London, 'which had been opened to the public when the government requisitioned their iron railings for scrap metal in 1940,' were once again being closed off.

"There was deep fear among policy makers in both the United States and the U.K. that the economy would tank when the war ended. The wartime economy put everyone to work, including women, who had previously mostly stayed at home; the transition to a peacetime economy would surely reduce employment and lead to some serious dislocations and a period of labor strife. Inflation fears were rampant, too, because wartime laws on price stabilization across a host of sectors were due to be lifted.

"Wartime planners like the New Dealer Chester Bowles, who as the war drew to a close headed the Office of Price Administration (where a young Richard Nixon worked for a time), saw all this coming and wanted to avoid these shocks. But they were also driven by larger, historic motivations in both the United States and Britain: that these nations, the world's two most durable democracies, must not simply revert to the way things were before; that they were going to emerge from the war, first, in a new position of economic and political supremacy vis-a-vis the rest of the world and, second, with something of a duty to deliver on the mighty ideals they had invoked in fighting Hitler and would con­tinue to invoke against Stalin during the Cold War.

"This meant, in short, that new degrees of social provi­sion would be necessary and that government would have to drive this activity because the private sector on its own would not. In the U.K., this thinking was most famously made manifest in the Beveridge Report. On June 10, 1941, the War Cabinet commissioned Sir William Beveridge, an economist who had served in a range of government posts, to conduct 'a survey of the existing national schemes of social insurance and allied services, including workmen's compen­sation and to make recommendations.' In November 1942, he issued his report, which he packaged as an assault on the 'five giants' that plagued the lives of the greater proportion of the British population: want, disease, ignorance, squalor, and idleness. The two that you couldn't get away with today, ignorance and idleness, were seen in the report as reflecting not moral failings of the people but rather the failure of society to properly educate people and provide them with sufficient motivational opportunities. The report's recommendations were sweeping, especially so in a country that had not embraced government expansion in the 1930s in quite the way Roosevelt's America had. By 1945, the Labour Party released its manifesto for that year's campaign, called Let Us Face the Future. While a bit vague on the particulars on matters like housing and health care, the manifesto nev­ertheless committed the party to expansive measures ('the best health services should be available free for all').

Fireside chat on the State of the Union (January 11, 1944)

"Something similar was happening in the United States. It was happening without quite the same level of commitment, because the American Democratic Party was more ambiva­lent about such matters than the British Labour Party, and because the American president was ideologically elusive; yes, despite all that Franklin Roosevelt accomplished and all the change he oversaw, he was in some ways a cautious poli­tician, unwilling to confront his party's segregationists, back­pedaling toward deficit reduction after his 1936 reelection. But he was being pushed on this matter of the postwar econ­omy by his advisers, and none more so than Chester Bowles. Around Thanksgiving 1943, as Roosevelt was preparing to leave for the Tehran Conference with Churchill and Stalin, at which the Western powers committed to opening up a second front against Nazi Germany, Bowles sent Roosevelt a memo. He urged the president to return from Tehran with the message that the soldiers were asking him about what kind of country they would be returning home to -- one still stunted by unemployment and poverty, or one committed to a new dynamism. It had to be the latter. And so Bowles advised FDR to return from Iran and give a speech that might go as follows:

Therefore, I propose a second Bill of Rights in the field of economics: the right to a home of your own, the right of a farmer to a piece of land, the right of the businessman to be free from monopoly competi­tion, the right to a doctor when you're sick, the right to a peaceful old age with adequate social security, a right to a decent education.

"Roosevelt did not exactly respond with enthusiasm. He shared the memo with another aide and asked, 'What the hell do I do about this?' But he did come around. The next January, in his State of the Union address, Roosevelt unveiled his proposal for an 'Economic Bill of Rights' the rights to work, food, clothing, and leisure; freedom from monopolies and unfair competition; additional rights to housing, edu­cation, medical care, and Social Security. Bowles and other New Dealers were hopeful that Roosevelt would make this the theme of his reelection campaign. He didn't; he ran largely as a wartime president, and he mentioned the Eco­nomic Bill of Rights only one other time, in a speech in Chi­cago in late October that was broadcast nationally on radio. But it was enough. The Democratic Party was committed now to postwar Keynesianism in a way it had not been before Bowles's intervention and Roosevelt's speech."

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Michael Tomasky


The Middle Out




Copyright 2022 by Michael Tomasky


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