INTRODUCTION

Welcoming the Future

The left is likely to dominate the twenty-first century and there is little the right can do about this except adapt. This seems counter-intuitive in light of the modest success the left has enjoyed since the Great Financial Crisis of 2008–09. Even in the United States, where Democrats held the presidency under Barack Obama for eight years, progressives have had difficulty moving their policies forward, suffering instead through an endless series of political battles with a determined and extreme Republican Party. This situation has only been exacerbated by the stunning election of Donald Trump to the presidency in 2016.

But this is a short-sighted perspective. It overemphasizes the role of crisis and underestimates the role of long-term fundamental change. A look at the structural and economic shifts remaking advanced societies shows that the left is in a far better position to advance its agenda than the right. The twenty-first century, despite a rocky start, is likely to be a progressive century, in which the right will be forced to play on the left’s terms to be competitive.

Here’s why. Start with the rise of new postindustrial progressive coalitions across the advanced world. They are taking the place of coalitions based on the declining traditional or blue-collar working class. In the United States, the blue-collar workforce is down to only about a fifth of the total workforce. Closely related to this trend, employment in the industrial sector has dropped rapidly across countries, replaced by employment in the service sector. The current level of industrial employment in the United States is only 16 percent. In addition, as the ranks of the traditional working class have thinned they have also become generally less supportive of mainstream left parties. In the United States, the white working class, which contains the bulk of the traditional working class, has declined so much in its Democratic sympathies that it is now more accurately thought of as a Republican group.

Many observers on the left have despaired at these trends, concluding that the left in the twenty-first century is doomed. But the decline of the traditional working class is intimately bound up with a change that fundamentally favors the left: the broad structural shift away from manufacturing and toward a postindustrial, knowledge-based society embedded in a global economy. Accompanying this shift have been changes in family and values norms—lowered fertility, diversity in family forms, rise of postmaterial values, decline of traditional religion—sometimes referred to as the Second Demographic Transition. Together these changes have given rise to an explosion of left-leaning groups that is overshadowing the decline of the working class and powering the emergence of new left coalitions. Conservatives, in contrast, are relying ever more heavily on declining social sectors to buoy their electoral fortunes.

But if there is such potential for new progressive majorities, why is there such difficulty turning this demographic dividend into consistent progressive governance? Even in the United States, where the new coalition has been relatively united and successful, Barack Obama’s two presidential victories were followed by routs in the Congressional elections of 2010 and 2014 and, in 2016, the election of Donald Trump to the presidency.

In Europe, while there have been some notable election victories for the left (e.g., France, Italy), the momentum from these victories has dissipated quickly. Across the continent, the left has lacked sufficient strength to carry its program forward and, even when in control of the government, has typically settled for a “responsible” administration of austerity that preserves as much as possible of the welfare state. This has made many social democratic parties increasingly unpopular. It would appear that the left’s ability to move European societies onto a progressive path and keep them there faces severe limits at the current time.

But these political difficulties are not insuperable. In fact, they are highly likely to be overcome, for three reasons. The first reason is that rising coalitions will continue to grow, strengthening the left, while the right’s base constituencies will continue to decline. Electoral arithmetic is therefore on the left’s side.

The second reason is that only the left is willing to confront capitalism’s “Piketty problem.” The Piketty problem, as Thomas Piketty’s magisterial Capital in the 21st Century establishes, is that capitalism has innate tendencies toward rising inequality and concentration of wealth that will increasingly crimp living standards and frustrate economic mobility in a slow growth environment. The left sees this as a real problem that cannot be solved by the market alone. The right is defined by its defense of market outcomes, no matter how dismal—hence its continuing support of counter-productive austerity measures. The right’s view is out of touch with current and future economic reality and will be increasingly unpopular with voters.

The third reason is that the left will be forced to actually solve the Piketty problem. The solution to the Piketty problem is clear: government action to promote faster and more equitably distributed growth. The right has no interest in this; the left is intrinsically inclined in this direction even if support for this path has been less than robust in recent years, as parties fight a rearguard action to defend the welfare state. But electoral necessity will force them to move decisively in an activist direction. Their emerging constituencies—immigrants and minorities, professionals, the highly educated, women, singles, seculars, Millennials—by and large are not the chief beneficiaries of existing welfare states and need a twenty-first-century version of progressive state action to enable their future. The left’s political future therefore lies in this new direction.

Call it the “opportunity state.” Movement in this direction will be facilitated by two important factors. The first is the emergence of “middle-out” or “equitable growth” economics, a burgeoning school of economic thought which sees the economic health of the middle and aspirational classes as not just a desirable outcome of growth but rather as an actual driver—in fact, the key driver—of growth. Conversely, high inequality is seen as not just unfair and injurious to those who come out on the short end of the stick but as an active obstacle to growth.

This will allow the left to make a compelling case for building the opportunity state, arguing that strong growth is eminently possible and with a much fairer distribution of the spoils than we are currently seeing. Indeed, the latter is the precondition for the former. Thus, instead of plying the rich with tax cuts and other goodies on the trickle-down theory that the wealthy are the job creators, middle-out economics posits that a relentless focus on the economic health and dynamism of the middle and aspirational classes, the real job creators, is the correct way to grow the economy.

We can already see the outlines of this approach coming into being. Obama, Hillary Clinton and the mainstream of the Democratic Party have shifted away from their flirtation with deficit reduction and now embrace an economic philosophy that even Obama has termed “middle-out economics.” Obama initially proposed, and candidate Clinton endorsed, an agenda that includes universal pre-K, free access to two-year colleges, paid family leave, subsidized child care and robust investment in infrastructure. Granted, most of this agenda has little chance of passage with the current Congress and presidency, but the Democrats are placing their bets that this is the agenda of the future.

Even in Europe we see signs that austerity’s shelf life is limited. Indeed, there is little doubt that were not Germany and her institutional allies still using their economic muscle to prevent any loosening of austerity, Eurozone policy would have tilted toward fiscal expansion and growth long ago. It is highly unlikely that German chancellor Angela Merkel and company can keep the lid screwed down for much longer; the continued rise of left and right populist parties all over Europe, from Syriza in Greece and Podemos in Spain to the National Front in France and the Freedom Party in Austria, shows clearly that the situation is not stable. As the great economist Herbert Stein put it: “If something cannot go on forever, it will stop” (usually known as Stein’s Law).

It is worth stressing just how little of substance the right-wing austerity offensive has managed to achieve, beyond stopping the economic recovery in Europe and delaying it in the United States. The welfare states in Europe have been starved of support but not fundamentally altered for the simple reason that they’re too popular. And in the United States, the Affordable Care Act has passed and taken root, the Dodd-Frank financial regulations have been enacted, executive actions were taken to protect the environment and mitigate climate change and so on. The state has not been gutted; far from it, it is ready to be taken to another stage.

That new stage will be central to Democrats’ identity by 2024 or so, and much of the debate between the parties will be about whether substantial government investment or a conservative alternative with a more limited, though still significant, role for government is more effective. For example, a Democratic presidential candidate in 2024 might be arguing for a dramatic expansion of the American educational system—ranging from universal pre-K through free college—while a Republican candidate might also advocate expanded access, but on a more limited basis, such as combining student subsidies with tax breaks for profit-making schools. Or Democrats might advocate a Manhattan Project–style massive investment in bringing down the price of clean energy and building the infrastructure to match, while Republicans might counter with more modest investments based on public-private partnerships. The debate, in short, will focus on how government can provide opportunity and growth for the middle and aspirational classes rather than whether government should try to do so.

The second factor facilitating movement toward the opportunity state is the tremendous potential of technological advance. Starting with the Industrial Revolution, periods of high growth have been driven by technological breakthroughs and the twenty-first century will be no different. We are still in the early days of the ICT (information and communications technology), biotechnology and renewable energy revolutions. Just as in the past, realizing the growth potential of these breakthroughs depends heavily on government support for advanced research, new infrastructure and higher levels of education. Since today’s right is hostile to government action in all these areas, and even hostile to science itself in some instances, it will fail as a promoter of growth in the long term. The left, fundamentally pro-science and pro–support for technological change, will fill this void and reap the benefits of growth promotion.

This optimistic perspective is quite a contrast to the gloom and pessimism that currently pervades the left. Why is that? One reason is the Piketty problem discussed earlier. Capitalism has very real tendencies toward inequality which have been poorly resisted in the last several decades. That naturally makes the left feel like it is losing.

Another is the challenge to the welfare state and traditional left political parties since the 1970s. An era in which the welfare state expanded in a relatively unproblematic way and mass left political parties enjoyed great electoral success was succeeded by an era in which the welfare state has been on the defensive and left parties’ electoral success has been mixed at best. Again, that makes many leftists feel like their cause is losing.

Still another is a sense on the left that some problems have been allowed to grow so large they can’t be solved—that time is running out or has run out. Global warming is the best example of this, but the dominance of the one percent also qualifies, as do the rise of the robots, the struggles of the middle class and the fate of the poor. Hence, the feeling on the left of running hard but falling farther and farther behind what needs to be done.

Finally, there is the disappearance of a revolutionary alternative to capitalism. The revolution will not only “not be televised,” as radical poet Gil Scott-Heron declared in 1970, it will not happen. And that’s a good thing. Revolutions are highly risky endeavors, leading frequently to long-term economic disruption and authoritarianism. With the disappearance of socialism, the leading contender to replace capitalism, as a plausible systemic alternative, there seems little reason to run those risks. That’s disappointing to many on the left who had hoped capitalism could be transcended in some form.

It’s time for supporters of the left to fully acknowledge they are not capitalism’s gravediggers, but rather its caretakers. Their job is to make capitalism work better, not to replace it. And, critically, as this book explains, they need to realize that their pessimism about the state of the world today and its future is deeply misguided. Instead, the twenty-first century, under the stewardship of the left, will likely be a century of both exceptional material progress and greater social justice. The era of the optimistic leftist is upon us; it is time for the left to discard its congenital pessimism and hop on board.

ONE

The Left in History—How and Where Has the Left Succeeded?

Before mapping out the left’s future, it is first necessary to consider its past. This past, as we shall see, is widely misunderstood. When understood correctly, it helps bring the left’s future into focus—a future far more promising than most currently believe.

What is the left? Historically, the term goes back to the French Revolution, when those who supported the absolute monarchy sat on the right in the National Assembly and those who supported change sat on the left. Through many changes and permutations, these terms have stayed with us to the present day, with similar, if updated, connotations. The right today generally defends the class structure and economic outcomes of the current system (capitalism) as fair and efficient, sees traditional norms and social structures as fundamentally positive and does not believe that the scope of political and economic democracy needs to be expanded. The left generally believes the class structure and economic outcomes of the current system need to be significantly changed, sees traditional norms and social structures as negative constraints on human potential and does believe that the scope of political and economic democracy needs considerable expansion.

This is a pretty broad definition. But it is appropriate. There is no sound reason to confine one’s definition of the left to those who believe capitalism is fatally flawed and must be replaced with something different or those who believe, more generally, that the current system must be radically restructured to achieve any modicum of justice. Socialists and radicals may choose to conceptualize themselves as “the left,” categorizing those who believe significant reform within the system is both desirable and feasible as props to the system rather than part of the left. No one can stop them from doing so. But this is an arbitrary distinction we need not accept. Instead, the left should be defined on the basis of commitment to change, rather than on a single preferred strategy for achieving change.

Thus the left, broadly conceived, certainly includes socialists, social democrats and radicals, but also greens, liberals, progressives and generally left-of-center parties like the Italian and American Democrats. Defined in this way, how and where has the left succeeded historically? And by “success” I don’t mean struggled valiantly or had large demonstrations: where have they actually achieved reforms that made people’s lives better?

By and large, the left has achieved much more success when times were good than when times were bad. Hard economic times and rising inequality, rather than generating broad support for more democracy and social justice, more typically generate pessimism about the future and fear of change. In contrast, when times are good, when the economy is expanding and living standards are steadily rising for most of the population, people see better opportunities for themselves and are more inclined toward social generosity, tolerance and collective advance.

THE POST–CIVIL WAR ERA AND THE LEFT

Take, for example, the post–Civil War history of the United States until the Great Depression. The second industrial revolution gathered force right after the Civil War. A wave of technical innovation created or transformed the chemical, electrical, petroleum and steel industries. And massive infrastructure development knitted the country together into a powerful world-class economy. Growth was particularly strong in the 1870s: real per capita income went up almost 3 percent per year.1

Parallel to this economic advance, the first shoots of the American welfare state came into being. Spending on poor relief in the states increased tenfold, and the postwar pension system for disabled veterans and veterans’ wives—American’s first national anti-poverty program—was dramatically expanded in 1879. Public spending on education ramped up all over the country.2 And until the latter part of this period, significant progress was made on improving the condition of blacks, both legislatively and materially.

But this tremendous growth and climate of social advance did not last. Income growth in the post–Civil War era, which had started out so well, ran into severe problems in the 1880s. In that decade, per capita income growth fell to just 0.6 percent per year.3 The situation worsened in the first half of the 1890s, as the recession of 1893 saw increased unemployment, from 4 percent to 18 percent, and sharply reduced incomes. By 1895, per capita income growth had stagnated for 15 years, punctuated by numerous economic dislocations, leading to bitter resentment among the working classes. The gap between the rich and poor—already a problem—worsened over this period,4 with the wealthiest Americans amassing fabulous fortunes, while workers, particularly immigrant workers, lived in appalling conditions in the cities.

Then there were the farmers. This group was isolated from the urban-industrial life that was beginning to dominate the country, promoting a sense of relative economic decline and obsolescence. And with the declining farm prices initiated by the 1873 recession, they were suffering materially as well. By the end of that decade, wholesale farm prices had declined by 28 percent. By the mid-1890s, they had fallen another 43 percent. Between the early 1870s and the mid-1890s, the price of wheat fell from $1.12 a bushel to 50 cents or less, while the price of corn decreased from 48 cents a bushel to 21 cents a bushel.5

Finally, the rising “new middle class,” especially its professional component, felt deeply aggrieved by the country’s failure to make more progress. Despite the expert tools that were now at this class’s disposal, there was little scope to apply those tools, as status quo interests fiercely resisted any kind of meliorative agenda. Thus, despite the fact that their economic situation was typically far better than the workers and farmers, their sense of frustration was as deep or deeper.

So by the time the 1890s rolled around, no one in America was really happy with the state of the country save the wealthy. Dissatisfaction was concentrated in three general areas: the evils of bigness, the evils of corruption and the evils of injustice. The concern with bigness was centered on the super-rich and the monopolies they controlled, which were believed to rig the economic game in their favor and impoverish the workers and farmers. The concern with corruption reflected the public’s perception that the political parties were under the control of the big interests, who were using government to enrich themselves and fix elections, not to try to solve social problems. The concern with injustice included everything from the raw economic facts—workers’ low wages and falling farm prices—to urban living conditions to racial oppression and the lack of women’s suffrage. The solution, broadly speaking, was to break up and regulate bigness, reform government and elections to root out corruption and utilize expertise, and direct this reformed government toward the goal of social justice. The stage was set for a more progressive politics.6

The middle class had numerous organizations and projects working on various aspects of these problems in the 1880s and early 1890s. Included here would be movements for political reform in the cities, for helping the poor (e.g., Hull House in Chicago) and for women’s suffrage. And workers did have some success in self-organization through union leader Terence Powderly’s Knights of Labor, which peaked at 700,000 members in 1886. But first out of the gate in terms of real political impact were the farmers. Starting with the Grange movement, then the Alliances and finally an actual political party, the People’s (Populist) Party, organized farmers pressed an ambitious reform agenda focused on limiting the power of big banks, brokers and merchants and reforming government to make it more democratic. The Omaha Platform adopted at the People’s Party convention in 1892 called for the abolition of national banks, a graduated income tax, direct election of senators, civil service reform, a working day of eight hours, and government control of all railroads, telegraphs and telephones. It also called for replacing the gold standard with free coinage of silver, a provision designed to combat the deflation of farm prices and make it easier for farmers to repay their debts.

In the election of 1892, the People’s Party did well—extremely well for a third party in America. They pulled over a million votes, 8 percent of the total, and carried five states: Kansas, North Dakota, Colorado, Idaho and Nevada. This strong showing raised the political profile of serious reform. But the party itself would not last long, due to the embrace of their free silver idea (though little else) by the Democrats under William Jennings Bryan in 1896. This led the People’s Party to make Bryan their presidential candidate as well and essentially ended their role as an independent political force.

The result was a disaster for both the Democrats and the Populists. Both parties were indelibly identified with the economic interests of the farmers in the countryside that, in this case, were in direct conflict with the economic interests of the workers in the cities. Free silver would certainly help the farmers but workers would wind up with paychecks that bought less, thereby lowering their standard of living. Moreover, William McKinley and the Republicans defended high protective tariffs, while the Democrats/Populists opposed them. Again, this counterposed the interests of workers in the cities, who benefited from protection of the industries in which they worked, to those of farmers in the countryside.

In short, the election of 1896, despite Bryan’s efforts to invoke a coalition of the “toiling masses” in the cities and countryside, pitted the interests of a declining class, the farmers, against those of a rising class, the urban workers. Moreover, Bryan’s impassioned pleas were to voters who had experienced 15 years of stagnant living standards. This meant that, despite the very real discontent, voters were too fearful and unsettled to support a bold reform agenda.

All this was a recipe for defeat and defeat duly followed, driven by uniformly sharp Democratic losses in urban areas like Boston (19 percentage points), Baltimore (19 points), New York (17 points) and Philadelphia (16 points).7 While some of this vote would come back to the Democrats in future presidential elections—and remain there for many state and local elections—the Republican claim on a significant share of the urban working-class vote would remain.

THE PROGRESSIVE ERA

But if the Populists were dead and Republicans ascendant, progressive reformers were still very much alive—in fact, they were just beginning a period of tremendous success. There were several reasons for this.

First, very little progress had actually been made in addressing the evils of bigness, corruption and social injustice—as indeed is generally the case when times are bad. Despite the efforts of Populists and reform activists, not much had changed since 1880. There were a few exceptions—the secret ballot had become widespread and a number of state legislatures had passed safety and workers’ compensation laws. But this was very small beer compared to the problems progressive reformers were trying to remedy. So their agenda was, if anything, more relevant than ever.

Second, a key effect of the realigning election of 1896 was that reform sentiment was spread more uniformly across the two parties—a paradox, since the common interpretation at the time was that conservative Republicans had overcome radical Democrats. Ex-Republican urban reformers, or “Mugwumps,” who had joined the Democrats in the 1880s, returned to their original party and promoted successful reform mayors like Hazen Pingree of Detroit and Golden Rule Jones of Toledo. Ex-Republican agrarian reformers who had joined the Populist Party also returned in large numbers to their original party. These returned Populists joined forces with agrarian reformers who had never left the party to create an insurgent reformist strand of Republicanism in states like Wisconsin (Robert La Follette) and Iowa (Albert Cummins).

Third, and critically, McKinley’s election ushered in an era of strong economic growth that benefited all classes. Poor harvests in Europe increased demand for American farm products, while the availability of gold suddenly increased (Alaska and Yukon gold rushes, increased production from South Africa), loosening credit and the money supply. That eliminated the deflation problem that had particularly bedeviled the farmers, while American industry was boosted by the rise of mass production in sectors like auto and steel. As a result, the intense conflict between free silver and tariff protection swiftly faded into irrelevance. Between 1896 and 1913, the economy more than doubled in size and real per capita income rose by 2.5 percent per year.8 Unemployment, which was still 14 percent in 1896, fell to 4 percent by 1901 and stayed near that level until World War I, when it fell even lower.9 Manufacturing workers did particularly well, with their annual earnings rising steadily, including a spurt from $550 to $900 between 1908 and 1917.10

This concatenation of factors produced an exceptionally favorable climate for progressive reform after 1896. A far-reaching reform program had already been popularized. Reform now had a powerful presence within both parties, in each case spreading far beyond the ranks of middle-class activists, who were particularly exercised by the corruption issue, to workers and farmers concerned with social and economic justice. Indeed, even within the Democratic Party, where ethnic, working class–based “bossism” had played such a central role, reformers like Al Smith and Robert F. Wagner of New York and David Walsh of Massachusetts emerged and played prominent roles. And the improved economic situation ended the conflict over free silver, which had divided workers and farmers and diverted political energy from the central parts of the reform program. This prosperity also, as we would expect, toned down nativist and other intolerant, backward-looking sentiments that always lurked at the edges of populism and promoted an optimistic orientation toward change and the common good.

In McKinley’s first term, most of the reform victories were at the state and municipal level. While these victories were gratifying, reformers nevertheless felt frustrated because they knew many of their most important issues could only be addressed at the national level. But with McKinley’s death through assassination in 1901 and his succession by Teddy Roosevelt, reform suddenly had the national-level advocate it needed.

In Roosevelt’s first term, he moved cautiously, looking toward 1904, when he could be elected president in his own right. But he did move to establish the power of the federal government to expose and act upon monopolistic corporate practices. In 1902, he initiated a suit against a new and powerful railroad combination, the Northern Securities Company. And while the traditional Republican approach had been to favor capital, Roosevelt moved to make government more of an impartial regulator of labor and capital. In the 1902 United Mine Workers (UMW) strike, he actually threatened to seize the mines if employers did not agree to impartial federal arbitration. Eventually, the UMW won a nine-hour day and a 10 percent wage increase. It was no coincidence that such labor victories took place in this era and not during the hard times that preceded the election of 1896.

Roosevelt promised a “Square Deal” for everyone in the 1904 campaign and won re-election with a thumping 57 percent of the vote, losing no states outside the south. He then proceeded to move more authoritatively in a reform direction. In 1906, the Hepburn Railroad Regulation Act was passed, giving the Interstate Commerce Commission—whose purview had been strictly limited by the courts—the right to inspect the books of railroad companies. Also in 1906, the Pure Food and Drug and Meat Inspection Acts were passed, getting the federal government into the business of protecting the people’s health. In 1907, he proposed even bolder reforms, including the eight-hour day, broader worker compensation, inheritance and income taxes, and regulation of the stock market. He also vastly expanded the national forest system to take millions of acres out of private development hands.

Roosevelt had promised not to serve more than two terms and did in fact face serious opposition from conservatives in his own party who were outraged by his “radical” actions and rhetoric as president. He elected not to run for president in 1908 and instead designated his hand-picked successor, William Howard Taft, to carry on the progressive cause as the Republican nominee. Taft ran as a reformer, even adding some of his opponent William Jennings Bryan’s reform ideas to the portfolio he inherited from Roosevelt.

Taft easily won the 1908 election with roughly the same coalition that elected Roosevelt in 1904, albeit with a somewhat lower vote total. However, once Taft assumed office it became apparent that his reform commitments were considerably tempered by attentiveness to business interests. He failed to meaningfully lower protective tariffs, which reformers increasingly believed was essential to undermining the power of the trusts. He also removed Roosevelt’s conservationist secretary of the interior, James Garfield, replacing him with Richard Ballinger, a corporate lawyer. Ballinger promptly attempted to make a million acres of public lands available for private development.

These and other actions infuriated the reform wing of the Republican Party, which ran insurgent candidates against conservatives in party primaries in 1910. The reform Republican candidates defeated many of their opponents, while suffering no losses of their own. Democrats hopped on the reform bandwagon as well, running progressive candidates of their own. They succeeded in taking control of the House of Representatives for the first time in 16 years and made significant gains in the Senate. The electorate was clearly ready for further and bolder reforms.

Taft was not impervious to these sentiments and attempted on other fronts to prove his reformist bona fides. He was active on the trust-busting front, prosecuting 80 lawsuits against the trusts. He also further strengthened the Interstate Commerce Commission, reformed the postal system and expanded the civil service. And, though these amendments did not pass until Woodrow Wilson’s administration, Taft supported both the 16th Amendment (allowing a federal income tax) and the 17th Amendment (direct election of senators by voters to replace selection by state legislatures).

Nevertheless, these moves were not enough to appease Republican progressives and he wound up facing challenges for the 1912 Republican nomination. First this came from Robert La Follette but then more consequentially from Roosevelt himself, who returned to active politics in September 1910 with his famous “New Nationalism” speech in Osawatomie, Kansas. Roosevelt argued that only a strong federal government could effectively pursue social justice and promote the common good. He supported, among other things, progressive income and inheritance taxes, child labor laws, workers’ compensation for industrial accidents and tougher regulation of corporations.

But Taft would not yield to Roosevelt’s challenge and the Republican Party split in two for the 1912 election. The progressives formed a new party, the Progressive Party, with Roosevelt as their candidate and the conservative Republicans renominated Taft. Rounding out the field were Woodrow Wilson for the Democrats and Eugene Debs for the Socialists.

The Progressive Party brought together numerous social reformers, activists and political insurgents under an expansive banner of national political change. Arguing that the country had reached the pinnacle of progressive sentiment, the Progressive Party put forth its “contract with the people” to help eliminate the “hazards of sickness, accident, invalidism, involuntary unemployment and old age.”11

Wilson’s candidacy for the Democrats was hugely significant since it was the first time a truly progressive, as opposed to populist, reformer had been nominated by the Democrats. The Democrats’ New Freedom platform of 1912 had much in common with the New Nationalism approach of Roosevelt, differing primarily in approaches to trusts and economic concentration: Roosevelt wanted aggressive regulation of the trusts, while Wilson argued that breaking up the trusts, rather than regulating them, was the real solution.

Taken together then, the voters in 1912 had three progressive candidates (including Debs) to choose from and one conservative candidate. The result was a landslide for progressivism. Three of every four votes cast was for Wilson, Roosevelt or Debs. Taft received a meager 23 percent of the vote, carrying only the states of Utah and Vermont. Roosevelt carried 27 percent of the vote and the states of Pennsylvania, Michigan, Wisconsin, South Dakota, California and Washington. But Wilson’s 42 percent plurality sufficed to carry every other state, giving him an overwhelming 435 electoral votes.

The 1912 progressive vote, while spread across three different candidates, prefigured the progressive coalition that would come to dominate the country in the New Deal era. Perhaps for the first time, the rising working class was completely in the progressive camp, along with the urban middle class and significant sections of the farmers. The future for progressivism, in the midst of the long boom of the early twentieth century, seemed full of promise.

And in many ways, the Wilson era delivered on that promise. In 1913, the 16th (allowing income taxes) and 17th (direct election of senators) Amendments finally were ratified by enough states, thanks to the unstinting efforts of progressives. Wilson followed up on the 16th Amendment by getting Congress to pass a progressive federal income tax. Also in 1913, he succeeded in reforming the banking sector through the Federal Reserve Act, which created a system of twelve regional banks to manage and stabilize banking activity. In 1914, he proposed and Congress passed the Federal Trade Commission Act, creating a federal agency with considerable regulatory power to police business. Interestingly, this latter idea was originally proposed by Roosevelt and was more characteristic of his New Nationalism approach than Wilson’s New Freedom approach.

Later on in Wilson’s presidency, he appointed progressive Louis Brandeis to the Supreme Court in 1916. Brandeis was the first Jew to serve on the Court. Wilson also supported a measure creating a system of workers’ compensation for federal employees and another measure, the Keating-Owen Act, the first federal law regulating child labor. When the latter law was struck down by the Supreme Court, he had another law passed that heavily taxed products using child labor.

However, Wilson was not so friendly to other progressive reform efforts, refusing, for example, to support the ongoing drive for women’s suffrage. (Despite his lack of support, the 19th Amendment, giving women the vote, was finally ratified by enough states in 1920.) And shamefully he supported legal segregation in federal agencies, reversing much of the work Roosevelt had done to eliminate racial barriers.

He also did little that could keep the progressive movement going once his presidency was over. In his second term, he became preoccupied with international affairs due to the U.S. entry into World War I. And he played a central role in promoting the Red Scare of 1917–20, where domestic radicalism became a target of both police suppression and nativist sentiment. The resulting atmosphere was hardly conducive to the cause of progressive reform.

THE FADING OF THE PROGRESSIVE ERA

To some extent, the progressive movement was also a victim of its own success. By 1920, progressives had had dramatic success breaking up corrupt political machines in the cities, promoting the use of nonpartisan technical experts (e.g., city managers) and expanding democracy in the states through initiatives, referenda and recall. And much of their reform agenda had been implemented: direct election of senators, a progressive federal income tax, much tougher regulation of business, lowering of protective tariffs, women’s suffrage, action against child labor, federal regulation of food safety, a workmen’s compensation law, civil service reform and a stable banking system that was fair to the South and the West.

Finally, and critically, the national spirit of optimism that buoyed the progressives during most of the Progressive Era withered in the face of economic problems that set in soon after the end of World War I. America suffered four separate recessions between 1918 and 1927, with a particularly sharp one in 1920–21, and a fifth, which initiated the Great Depression, in 1929. By 1921, price deflation had returned, affecting both industrial and farm prices. Indeed, economic conditions in the early postwar years were in many ways reminiscent of the difficult era of the 1880s and early 1890s.

However, the economy did recover after these early years, posting particularly strong growth in 1922–23, in 1926 and in 1929, right before the stock market crash. It is to these years, and to general trends like a surging stock market and a rising consumer economy, that we owe our image of the “Roaring Twenties” as an era of unmatched prosperity. In actuality, overall progress across the 1918–1929 period was considerably slower than in the Progressive Era (1.8 percent per year growth in per capita income,12 compared to 2.5 percent per year in the earlier period), plus much of that progress was unevenly distributed. Income and wage inequality increased considerably,13 and farmers and many workers outside of urban manufacturing did comparatively poorly.

As a result of all this, the progressive movement found itself adrift and, in remarkably short order, removed from national power. Conservative Warren Harding secured the Republican nomination in 1920, an indicator of the fading fortunes of progressives within the Republican Party. Harding ran on a promise to “Return to Normalcy,” a slogan with nativist, isolationist and anti-progressive connotations. Harding’s priorities were an accurate precursor of the politics of the 1920s, which saw a sharp increase in racial violence and the rise of the Ku Klux Klan, new restrictions on immigration, rises in protective tariffs, increases in economic concentration and tax cuts for the rich.

Harding easily defeated progressive Democrat James Cox for the presidency. Cox, in fact, received only 34 percent of the popular vote and carried no states outside of the South. As poorly as Cox fared, he did better than the Democrats’ next presidential nominee, conservative corporate lawyer John Davis, in 1924. Davis received just 29 percent of the vote, carrying roughly the same states as Cox and losing handily to conservative Republican Calvin Coolidge, the incumbent (Coolidge had assumed the presidency upon Harding’s death in 1923).

The Democrats’ nomination of Davis also provided political space for progressives to run their own candidate in 1924, Robert La Follette, running on the same Progressive Party line Roosevelt did in 1912. La Follette did not do quite as well as Roosevelt, though very well indeed for a third-party presidential candidate. He received 17 percent of the vote, but carried only his home state of Wisconsin. He did relatively well in the northern states running from Wisconsin to the Pacific coast and in California. But he did relatively poorly in the east.

Other than La Follette’s 1924 candidacy, the real progressive action in this period was in the states—for example, the rise of the Minnesota Farmer-Labor Party. State-level progressives kept the torch burning, seeking to build their strength for their next big opportunity. Their efforts bore some fruit in 1928, when Democrats, hoping to capitalize on discontent among urban workers and rural farmers, made progressive Al Smith their nominee.

Smith, a New York City born-and-bred Irish Catholic, was perhaps not perfectly suited to appeal to rural America, but he nevertheless made significant Democratic gains in these areas. For example, he carried 45 counties in Illinois, Iowa, Minnesota and North Dakota that had not been carried by any Democrat since Wilson.14 Smith was well-suited, however, to increasing Democratic penetration of the urban working class, particularly in the northeast, regaining ground that Democrats had been struggling to hold ever since the McKinley election of 1896. His huge majority in Boston converted Republican Massachusetts into Democratic Massachusetts, which it remains to this day. He also turned Providence and the state of Rhode Island Democratic, as well as cities such as New Haven, Scranton, Wilkes-Barre and Albany, and expanded Democratic majorities in urban areas like New York City and Jersey City. In this sense, Smith’s losing effort to conservative Republican Herbert Hoover, who carried 58 percent of the vote and 444 electoral votes, prefigured the far different electoral results of 1932, which will be discussed later in this chapter.

THE POSTWAR BOOM AND THE GREAT SOCIETY

The other great example from American history that fits the “good times help the left/bad times hurt the left” pattern is the post–World War II history of the country. World War II itself was a time of stunning economic dynamism in the United States: from 1941 to 1945 U.S. per capita income rose at over a 9 percent annual rate.15 Of course, that wasn’t sustainable, but even after the war the United States enjoyed almost 30 years of rapid economic advance.

Underpinning this era of advance was the adoption of the Keynesian economic consensus—a consensus that had evolved across the Western world in the late 1930s and during the world war. Following this consensus, U.S. progressives, who dominated Congress and the presidency for several decades after World War II, focused on managing economic demand, primarily through fiscal policy, to maintain full employment. Also following Keynesian precepts this activist fiscal policy included a big role for public investment. Returning GIs were provided with a free college education and low-interest, zero-down-payment home loans through the GI Bill. And government poured money into roads, science, public schools and whatever else seemed necessary to build up the country. Overall public investment by the federal government as a percent of GDP climbed steadily to around 2.6 percent of GDP per year by the end of the Keynesian era.16 Core infrastructure investment (in transportation, energy, water management) increased particularly rapidly (4.3 percent per year from 1950 to 1974).17

The results of this economic regime were impressive. The GDP growth rate was 3.8 percent per year between 1946 and 1973, and the per capita GDP growth rate was 2.4 percent over the same period.18 Unemployment, though considered high compared to booming Europe, averaged 4.8 percent over these years.19 And the growth in living standards was phenomenal: real median family income rose at a rate of 2.8 percent per year, more than doubling over the time period.20 Moreover, this income growth was remarkably equally distributed, with, if anything, a little stronger growth at the bottom and a little weaker growth at the top.21

Building upon this foundation of strong economic growth and rising incomes for the middle class and poor, progressives continued and refined the regulatory approach, social protections and economic security measures of the New Deal. And with Lyndon Johnson’s Great Society reforms of the mid-60s, they dramatically expanded government action in all these areas.

Most fundamentally, they attacked the continued existence of racial discrimination and oppression. Johnson signed the Civil Rights Act in 1964 and the Voting Rights Act in 1965.

The continued existence of poverty, an issue popularized by Michael Harrington’s 1962 book, The Other America, was addressed through the Economic Opportunity Act of 1964, which launched the “War on Poverty.” The War on Poverty included such initiatives as the Job Corps, VISTA, the Model Cities program, Upward Bound and Project Head Start.

The health care woes of older Americans, which frequently impoverished them, were addressed through the creation of Medicare in 1965, a universal health care program for the elderly. In the same year, Medicaid was established to provide basic medical care for the poor.

Environmental issues were targeted by a wide range of new initiatives going far beyond the federal government’s traditionally limited commitments in this area. The Clean Water, Water Quality and Clean Water Restoration Acts were passed. So too were the Wilderness Act, the Endangered Species Preservation Act, the Solid Waste Disposal Act and many others. The stage was set for creation of the Environmental Protection Agency (EPA) in 1970 and the activist environmental policies we are used to today.

Chronic money problems of low-income schools were addressed by getting the federal government into the education funding business through the Elementary and Secondary Education Act. Federal support for colleges and universities and for assistance to low-income students was increased through the Higher Education Act.

Consumer protection was enhanced through the Motor Vehicle Safety Act, the Fair Packaging and Labeling Act, the Child Safety Act, the Wholesome Meat and Poultry Acts and a number of other laws. These acts raised the bar for consumer protection far higher than it had previously been.

So, over nearly three decades, the Keynesian consensus in the United States produced strong economic growth, low unemployment, rapidly rising living standards and, through government, progressive actions to provide more protections and security for the average citizen. This produced a virtuous feedback loop between the political fortunes of progressives and the economic fortunes of the country.

Reflecting this feedback loop, until almost the very end of this period, the progressive-dominated Democratic Party received high levels of electoral support. As far as voters were concerned, progressives had delivered a better and ever-richer society and deserved that support. In the six elections between 1932 and 1948, Democratic presidential support averaged 55 percent. After the liberal Republican Dwight Eisenhower won two terms, in 1952 and 1956, the Democrats again averaged 55 percent presidential support in the 1960 and 1964 elections. And during almost all of this period, the Democrats controlled both houses of Congress.

THE FADING OF THE POSTWAR BOOM AND THE DECLINE OF THE LEFT

But this feedback loop was broken in the 1970s, as the complications of a globalizing economy started to bite. These complications undermined the stable international economic relationships of the postwar Bretton Woods system, including fixed exchange rates. The coup de grace was administered by the OPEC oil price shock of 1973. Inflationary pressures that had been building up inside the United States and other advanced countries could no longer be contained, producing high inflation rates that could not be brought down by high unemployment. This combination of high unemployment with high inflation was termed “stagflation.” Progressives at that time were unprepared with either an alternative to, or extension of, the postwar Keynesian system to fix this problem, which led to the end of the Keynesian consensus.

A conservative counter-revolution in economic thinking filled the vacuum left by the collapse of the Keynesian consensus. Conservatives, of course, had never been happy with the Keynesian consensus. Ideologically, they were opposed to the idea that the unregulated market had intrinsic flaws that only government could correct. And many conservatives had economic interests that predisposed them to resist and resent government intervention. So when the Keynesian system appeared to break down, they seized the opportunity to reinstate their views and discredit government’s role. They succeeded beyond their wildest dreams.

Leading the charge was conservative economist Milton Friedman. In his academic work he showed how inflationary expectations could derail the Phillips curve (a well-behaved tradeoff between unemployment and inflation) favored by Keynesian economists. And, with his wife Rose, he published the enormously influential Free to Choose, a no-holds-barred polemic in favor of self-interested individuals making “rational,” unregulated decisions and against anything that interfered with this process, especially government action. As far as Friedman was concerned, government’s economic role should be limited to little more than controlling the growth of the money supply.

This economic philosophy was obviously no mere reform or adjustment of the Keynesian system but a complete turnaround—a true counter-revolution. In short order, it came to dominate economic policymaking in the United States and other advanced countries. Deregulation and privatization became the order of the day, while Keynesian fiscal policy, especially the central role of public investment, was shunted aside. In the United States, this led to significant deregulation of the transportation, energy, telecommunications and financial sectors. The latter included the repeal of the Glass-Steagall Act, a Depression-era law that mandated barriers between different kinds of financial firms so that, for example, a low-risk commercial bank could not also be a far higher-risk investment bank.

The results of the conservative economic regime have not been good. Indeed, in every important way it has produced economic results far inferior to those of the Keynesian era. Start with the slow growth in living standards for the typical family, accompanied by a remarkable rise in inequality. As mentioned earlier, the postwar era until 1973 was notable for equally distributed growth and a dramatic rise in living standards (nearly 3 percent per year growth in family income). From 1973 to 2014, growth in median family income averaged just 0.4 percent per year—an equally extraordinary slowdown—producing a mere 16 percent aggregate rise in incomes over a longer time period.22

Moreover, in a pattern economist Paul Krugman and others have termed the Great Divergence, income growth for the affluent and, even more so, for the rich has been far better than for the median family over the post-1973 period, while income growth for the poor has been worse. At the 80th percentile, family income rose by 41 percent and at the 95th percentile by 61 percent, but only by 4 percent at the 20th percentile.23 In addition, income has become increasingly concentrated at the very highest reaches of the income distribution: the top 1 percent of the income distribution has been regularly receiving over one-fifth of total income in the last decade, most of which is received by the top one half of one percent.24 These are levels of income concentration not seen in the United States since the 1920s.

The basic facts about the rise in inequality since 1973 are fairly well known. Less well known is how poorly the post-1973 period compares to the Keynesian era in terms of overall growth. In other words, it’s not just that post-1973 growth has been poorly distributed; there’s also been less of it. This fact is particularly damning for the conservative economics that replaced Keynesianism, because that economics was supposed to unshackle the great capitalist growth machine from the heavy hand of government. Instead, real GDP growth has actually slowed down: 2.7 percent per year in the post-1973 period, compared to 3.8 percent per year in the Keynesian era. A similar slowdown can be observed in GDP per capita growth, down to 1.7 percent per year from 2.4 percent.25

The conservative economic regime has been similarly unsuccessful in keeping down the unemployment rate. Despite encouraging the capitalist economy’s allegedly natural tendency toward a full employment equilibrium, the conservative regime has produced higher average unemployment rates (6.1 percent) than those in the Keynesian era (4.8 percent).26

Accompanying this underwhelming record on living standards, inequality, growth and employment has been a steep decline in levels of public investment, considered of little importance by a conservative economics enraptured with the private sector. Overall public investment by the federal government as a percentage of GDP slipped from 2.6 percent per year at the end of the Keynesian era to 1.9 per year in the 2000s.27 And core infrastructure (transportation, energy, water management) investment slowed dramatically, from a 4.3 percent per-year average growth rate in the 1950–74 period to just 2.3 percent per year in the 1975–2007 period.28 Reflecting this neglect of infrastructure, the American Society of Civil Engineers has estimated that an additional $1.6 trillion in infrastructure investment is needed by 2020 simply to repair and maintain existing infrastructure in the United States, independent of any investments that might be needed to improve our current infrastructure (e.g., high-speed trains, broadband networks, and clean energy smart grids).29

Consistent with most of U.S. history, this run of relatively bad times has been generally bad for the left. And it has been most conspicuously bad in terms of support among the white working class. A sketch of the philosophy and politics of postwar U.S. progressives clarifies why this has been so. Postwar progressives’ worldview was shaped by a combination of the Democrats’ historic populist commitment to the average working American and their experience in fighting the Great Depression and World War II (and building their political coalition) through increased government spending and regulation and the promotion of labor unions. It was really a rather simple philosophy, even though its application was complex. Government should help the average person through vigorous government spending. Capitalism needs regulation to work properly. Labor unions are good. Putting money in the average person’s pocket is more important than rarified worries about the quality of life. Traditional morality is to be respected, not challenged. Racism and the like are bad, but not so bad that the party should depart from its main mission of material uplift for the average American.

That worldview had deep roots in an economy dominated by mass production industries and was politically based among the workers, overwhelmingly white, in those industries. And it helped make the Democrats the undisputed party of the white working class. Their dominance among these voters was, in turn, the key to their political success.

To be sure, there were important divisions among these voters—by country of origin (German, Scandinavian, Eastern European, English, Irish, Italian, etc.), by religion (Protestants vs. Catholics), and by region (South vs. non-South)—that greatly complicated the politics of this group, but the New Deal progressives mastered these complications and maintained a deep base among these voters.

Of course, the New Deal coalition as originally forged did include most blacks and was certainly cross-class, especially among groups like Jews and southerners. But the prototypical member of the coalition was indeed an ethnic white worker—commonly visualized as working in a unionized factory, but also including those who weren’t in unions or who toiled in other blue-collar settings (construction, transportation, etc.). It was these voters who powered four FDR election victories and the victories of Truman, Kennedy and Johnson, as well as the Democrats’ Congressional domination.

So New Deal progressives depended on the white working class for political support and the white working class depended on progressives to run government and the economy in a way that kept that upward escalator to the middle class moving. Social and cultural issues were not particularly important to this mutually beneficial relationship; indeed they had only a peripheral role in the uncomplicated progressivism that animated the Democratic Party of the ’30s, ’40s and ’50s. But that arrangement and that uncomplicated progressivism could not and did not survive the dynamic evolution of postwar capitalism.

On the one hand, this evolution changed the character of the white working class, reducing the size and influence of the Democrats’ traditional blue-collar constituencies. On the other, the growth of postwar capitalism was creating new constituencies and movements with new demands. These new constituencies and movements wanted more out of the welfare state than steady economic growth, copious infrastructure spending and the opportunity to raise a family in the traditional manner.

During the sixties, these new demands on the welfare state came to a head. Americans’ concern about their quality of life overflowed from the two-car garage to clean air and water and safe automobiles; from higher wages to government-guaranteed health care in old age; and from access to jobs to equal opportunities for men and women and blacks and whites. Out of these concerns came the environmental, consumer, civil rights and feminist movements of the Sixties. As Americans abandoned the older ideal of self-denial and the taboos that accompanied it, they embraced a libertarian ethic of personal life. Women asserted their sexual independence through the use of birth control pills and through exercising the right to have an abortion. Adolescents experimented with sex and courtship. Homosexuals “came out” and openly congregated in bars and neighborhoods.

Of these changes, the one with most far-reaching political effects was the civil rights movement and its demands for equality and economic progress for black America. Democratic progressives, both because of their traditional, if usually downplayed, anti-racist ideology and their political relationship to the black community, had no choice but to respond to those demands, as Lyndon Johnson finally did in 1964–65. The result was a great victory for social justice, but one that created huge political difficulties for the Democrats among their white working-class supporters. Kevin Phillips captured these developments well in his book The Emerging Republican Majority:

The principal force which broke up the Democratic (New Deal) coalition is the Negro socioeconomic revolution and liberal Democratic ideological inability to cope with it. Democratic “Great Society” programs aligned that party with many Negro demands, but the party was unable to defuse the racial tension sundering the nation. The South, the West, and the Catholic sidewalks of New York were the focus points of conservative opposition to the welfare liberalism of the federal government; however, the general opposition … came in large part from prospering Democrats who objected to Washington dissipating their tax dollars on programs which did them no good. The Democratic party fell victim to the ideological impetus of a liberalism which had carried it beyond programs taxing the few for the benefit of the many … to programs taxing the many on behalf of the few.30

But if race was the chief vehicle by which the New Deal coalition was torn apart, it was by no means the only one. White working-class voters also reacted poorly to the extremes with which the rest of the new social movements became identified. Feminism became identified with bra-burners, lesbians and hostility to the nuclear family; the antiwar movement with the appeasement of Third World radicals and the Soviet Union; the environmental movement with a Luddite opposition to economic growth; and the move toward more personal freedom with a complete abdication of personal responsibility.

Thus the progressive mainstream that dominated the Democratic Party was confronted with a challenge. The uncomplicated New Deal commitments to government spending, economic regulation and labor unions that had defined the party’s progressivism for over 30 years suddenly provided little guidance for dealing with an explosion of potential new constituencies for the party. Their demands for equality, and for a better, as opposed to merely richer, life were starting to redefine what progressivism meant and the Democrats had to struggle to catch up. Progressive action more and more seemed to be outside the party in radical organizations like Students for a Democratic Society (SDS) and in the new social movements.

Initially, progressive Democrat politicians responded to these changes in the fashion of politicians since time immemorial: they sought to co-opt these new movements by absorbing many of their demands, while holding onto the party’s basic ideology and style of governing. This was the first step away from the standard New Deal model of progressivism. Progressive Democrats of that era didn’t change their fundamental commitment to the New Deal welfare state, but grafted on support for all the various new constituencies and their key demands. After Lyndon Johnson signed the Civil Rights Act in 1964, the party moved over the next eight years to give the women’s, antiwar, consumers’ and environmental movements prominent places within the party. This reflected both the politician’s standard interest in capturing the votes of new constituencies and the ongoing expansion in the definition of what it meant to be a Democrat, particularly a progressive one.

But there was no guarantee, of course, that gains among these new constituencies wouldn’t be more than counter-balanced by losses among the old constituency—the white working class—who had precious little interest in this expansion of what it meant to be a progressive and a Democrat. And indeed that turned out to be the case with the nomination and disastrous defeat of George McGovern—an enthusiastic advocate of this new approach—in 1972. McGovern’s commitment to the traditional Democratic welfare state was unmistakable. But so was his commitment to all the various social movements and constituencies that were reshaping the party, whose demands were enshrined in McGovern’s campaign platform. That made it easy for the Nixon campaign to typecast McGovern as the candidate of “acid, amnesty and abortion.” The white working class reacted accordingly and gave Nixon overwhelming support at the polls, casting 70 percent of their votes for the Republican candidate.31

Indeed, just how far the Democratic Party fell in the eyes of the white working class over this time period can be seen by comparing the average white working-class vote for the Democrats in 1960 and 1964 (55 percent) to their average vote for the Democrats in 1968 and 1972 (35 percent).32 That’s a drop of 20 points. The Democrats were the party of the white working class no longer.

With the sharp economic recession and Nixon scandals of 1973–74, the Democrats were able to develop enough political momentum to retake the White House in 1976, with Jimmy Carter’s narrow defeat of Gerald Ford. But their political revival did not last long.

Not only did the Carter administration fail to do much to defuse white working-class hostility to the new social movements, especially the black liberation movement, but economic events—the stagflation of the late 1970s—conspired to make that hostility even sharper. Though stagflation (combined inflation and unemployment with slow economic growth) first appeared during the 1973–75 recession, it persisted during the Carter administration and was peaking on the eve of the 1980 election. As the economy slid once more into recession, the inflation rate in that year was 12.5 percent. Combined with an unemployment rate of 7.1 percent, it produced a “misery index” of nearly 20 percent.

The stagflation fed resentments about race—about high taxes for welfare (which was assumed to go primarily to minorities) and about affirmative action. But it also sowed doubts about Democrats’ ability to manage the economy and made Republican and business explanations of stagflation—which blamed it on government regulation, high taxes and spending—more plausible. In 1978, the white backlash and doubts about Democratic economic policies had helped to fuel a nationwide tax revolt. In 1980, these factors reproduced the massive exodus of white working-class voters from the Democratic tickets first seen in 1968 and 1972. In the 1980 and 1984 elections, Ronald Reagan averaged 61 percent support among the white working class, compared to an average of 35 percent support for his Democratic opponents, Jimmy Carter and Walter Mondale.33

Democrats appeared powerless to stop this juggernaut, saddled as they were with a double-barreled progressivism that increasingly seemed like a dual liability. On the one hand they were committed to a model of the welfare state economy that no longer seemed to work, and, on the other, they were tied to a set of constituency groups whose priorities seemed alien to middle America. It seemed to many progressives that their cause was hopeless, especially after their preferred candidate, Walter Mondale, got blown away in the 1984 election, losing every state but Minnesota and the District of Columbia.

It would take a quarter of a century from that low point for progressives to rise again to a stronger position. A great deal of this was powered by the ongoing diminution of the white working class and the emergence of a new progressive coalition based on rising demographics (much more on this in the next chapter). In addition, the impressive victory of 2008 that elected Barack Obama to his first term and brought the new progressive coalition center-stage in U.S. politics was powered by the Great Recession of 2007–09.

All told, Obama’s administration resulted in some impressive advances (see chapter 4 for a detailed discussion), the most important of which was the passage and implementation of the Affordable Care Act or “Obamacare.” It is reasonable to see the Obama administration as the most progressive administration since the days of Lyndon Johnson. For all that, Obama’s twin election victories did not usher in the progressive era many were hoping for. Resistance to further progressive measures and budgetary priorities was stiff in many parts of the country and progressives were routed in the two Congressional elections of 2010 and 2014, followed by Hillary Clinton’s defeat in the 2016 presidential election.

This has puzzled many on the left who assumed that the discrediting of the conservative economic regime in the crisis of 2007–09 would result in a durable shift to the left in U.S. politics. Instead, as is consistent with most of U.S. history, the Great Recession and poor economic performance since then has bred not just a thirst for progressive advance but also considerable fear and uncertainty, which presents a barrier to such advance.

Why this chronic tendency to ignore the lessons of history? One reason is intrinsic to the nature of the left: those on the left tend to believe the class structure and economic outcomes of the current system need significant change to achieve social justice. Therefore, when the system’s outcomes are particularly bad, as they have been in recent years, they believe their case for change is exceptionally strong and should convince more people.

THE NEW DEAL AND THE LEFT’S GREAT EXCEPTION

The most important reason, however, is the tendency of the left to focus on one particular period of U.S. history rather than the general pattern. That period of course is the New Deal. In this era, American capitalism was in a far deeper crisis than it has been in since, including the Great Recession of 2007–09. And yet, contrary to other periods of U.S. history, these deep economic difficulties birthed an era of far-reaching reform. Here is how that happened.

The campaign of 1932 was held against the backdrop of the Great Depression, with 24 percent unemployment. The Democrats turned to Franklin Delano Roosevelt (FDR) as their standard-bearer, a long-time progressive within the party who was governor of New York and had run for vice president on the 1920 Democratic ticket. FDR ran as a full-throated progressive who promised to use the tools of government to build from the bottom up and help the “forgotten man.” For this emphasis he was tagged with the “class warrior” label by many, including his rival for the nomination, 1928 Democratic candidate Al Smith. For Smith and some others who considered themselves progressive, FDR was just going too far and verging on anti-business radicalism.

But that was not how the voters saw it. FDR was elected in a landslide with 57 percent of the vote to Hoover’s 40 percent and carried every state save Pennsylvania, Delaware, Connecticut, Vermont, New Hampshire and Maine. This was the first appearance of what came to be known as the New Deal coalition, based around Democratic domination of the rising blue-collar working class (at the time two-and-a-half times as large as America’s farmers and farmworkers), especially urban Catholic ethnics and especially in mass production industries. In addition, this coalition included groups like blacks and Jews, who suffered discrimination in addition to their own economic problems, and white southerners generally, who had a historical attachment to the Democratic Party.

With this coalition backing him and a dire situation confronting the country, FDR proceeded to launch a wave of reform that considerably expanded the role for government in regulating the economy and achieving social justice. This was consistent with the aims and philosophy of progressivism, but went beyond anything progressives had previously attempted. In the famous first “Hundred Days,” the Civilian Conservation Corps was created to provide jobs, the Federal Emergency Relief Administration to provide urban income support and the Agricultural Adjustment Administration to provide farm price supports and mortgage refinancing. Substantial funds were appropriated for new jobs-creating public works programs, eventually evolving into the Works Progress Administration. The Emergency Banking Act was passed, reopening banks and instituting a bank inspection regime. The Glass-Steagall Act was also passed, strengthening bank safety, controlling speculation and creating the Federal Deposit Insurance Corporation, as was the Federal Securities Act, mandating full disclosure of financial information in stock sales.

In these first hundred days and thereafter, FDR was under strong pressure to move in this progressive direction and keep moving. This was not just from Congress itself, where progressive Democrats were in a mood to take decisive action, but also outside of Congress and, in some cases, outside of the major party structure. Father Coughlin of Michigan had a radio audience of ten million and was seeking to organize a National Union for Social Justice. Francis Townsend of California championed a radical pension plan, forming Townsend Clubs across the country. Also in California, Upton Sinclair ran for governor in 1934 on his EPIC (End Poverty in California) program. Then there was Huey Long in Louisiana and his Share Our Wealth movement, Floyd Olson of the Minnesota Farmer-Labor Party and the La Follettes in Wisconsin, who left the GOP in 1934, forming a state-level Progressive Party that swept the state. And perhaps most important of all, there were the labor unions, especially the insurgent industrial unions that eventually formed the Congress of Industrial Organizations (CIO). Their unstinting support for continuing and deepening the New Deal was crucial to the progress of reform.

With this pressure and deep economic difficulties to overcome, progressive advance continued for much of the 1930s. The Securities and Exchange Commission was formed to strengthen stock market regulation. The Tennessee Valley Authority and Rural Electrification Administration were established. The U.S. Housing Authority was created to provide housing for low-income families. The Food, Drug and Cosmetic Act was passed, the beginning of modern drug regulation. The Social Security system was established. Union organizing was encouraged through the Wagner Act and the establishment of the National Labor Relations Board. And the Fair Labor Standards Act was passed, specifying the 40-hour regular work week, mandating time and a half for overtime, prohibiting most child labor and setting a minimum wage.

Clearly, a great deal was accomplished in the 1930s, a veritable makeover of U.S. capitalism, even though the economic situation was generally dismal—per capita income did not recover to its pre-Depression level until 1940 and double-digit unemployment continued until U.S. entry into World War II. (Note, however, that the years 1934–36, when some of the most important New Deal legislation—Social Security, the Wagner Act on collective bargaining and the Rural Electrification Administration—was passed, were years of exceptionally fast economic growth, with over 10 percent GDP growth per year.) This has suggested to many on the left ever since that terrible economic times are when the left can expect to make the most progress.

But this is a very misleading model to work with. The spate of social progress during the Great Depression decade was very much the exception to the historical rule. A crisis on that scale, where desperation is so widespread that no alternative to radical change seems viable, is very unlikely to be repeated. Nor should we wish that to happen. Desperate times do indeed sometimes make for desperate measures, but there is no guarantee those desperate measures will be particularly progressive (think Germany in the very same decade of the 1930s). Instead we should be grateful that the automatic stabilizers and institutional safeguards built into capitalism today pull us back from the brink of such an all-encompassing crisis.

So if the Great Depression was the Great Exception to the general pattern of left advance, it is now time to decisively reject the Great Mistake that has been fostered by the Great Exception. The Great Mistake sees great things just around the corner in bad times if only the right strategy to galvanize the suffering masses to action can be discovered. This is not realistic. The idea that progress will be limited as long as bad times persist is far closer to the mark.

EUROPE AND TODAY

The European experience fits this pattern well (though, in contrast to the United States, there is generally not a period that stands out as a Great Exception).34 In the heyday of industrial capitalism, from around 1860 to World War I, rising living standards, reflected in generally high per capita growth rates, were associated with a raft of reforms in European countries’ democratic processes, significant improvements in citizens’ access to education and upward mobility, and the beginnings of welfare state programs and regulations. The interwar years in the 1920s and 1930s were considerably spottier, both in terms of economic performance and social advance, and the Great Depression, contrary to its effects in the United States, was a source of tragic outcomes for many European countries.

The great burst of progress was after World War II, where the left took advantage of unprecedentedly high growth rates and rapidly rising living standards to build out the European welfare states and thoroughly democratize their societies. But of course, as growth slowed after 1973, rising inequality began to bite (though generally not as much as in the United States), and as improvement in living standards became sluggish, social advance in Europe has correspondingly slowed down, just as in the United States.

So the general lesson of whether bad economic times or good times are best for left advance should be clear. It is absolutely necessary to agitate for progress during bad times—to defend previous progressive gains, to push reforms forward when they are possible and, of course, to develop the organizational strength of the left. But the strategic imperative of bad times should be to prepare for good times and help make those good times happen. Only then is the agenda of the left likely to have the success progressives seek.

This insight is especially timely today. The crisis of capitalism of the early twenty-first century has not delivered the climate for progressive advance that so many in our country hoped for. But a new progressive coalition is rising whose interests can only be served by a new and healthy stage of capitalist growth. Getting to that stage is the necessary precursor to the next big spate of progressive reform.

The same point applies with even more force to Europe. Progressives have been on the defensive, by and large, since the Great Recession ushered in an era of economic instability and slow growth (or no growth at all for some countries). Yet there too new progressive coalitions are emerging that could advance far—indeed, will only advance far—with a restoration of good times. These new progressive coalitions are the subject of the next chapter.

Copyright © 2017 by Ruy Teixeira