Rising economic inequality is considered the defining challenge of our time. Contributor MATTHEW FLACKS chats with Lane Kenworthy about a policy future both conservatives and liberals can embrace in Social Democratic America.
Lane Kenworthy | Social Democratic America
I pity the poor and aspire to be rich. I am a Director, Sr. Manager, and ascending Vice President in Corporate America. I am the grateful receiver of tax breaks and government policy focus. The consummate consumer; I hold the ideas, the conscience, the morality, the civility, and the endeavour. Who am I? I am the Working Middle Class.
Lane Kenworthy has spent his academic life charting the successes, failures and socio-economics of this vast, puzzling group called Middle America; from attitudes about welfare to immigration and social security. Will our soporific infatuation with this group ever abate? I recently spoke with the author about his book Social Democratic America: Five Myths About The Middle Class.
The developed world is undoubtedly obsessed with the middle class. It consumes almost everything in its wake, and is bloated on attention, self-appreciation and stoicism. So what of this compulsion? Mr Kenworthy suggests that the definition of the middle class is broad and open-ended. Contrary to popular commentary, the income of Middle America has enjoyed a slow growth since the 1970s, its rise relative to economic expansion, and more people define themselves in this bracket than ever before. The most striking aspect of the aspirant middle class is the incremental tightening of its debt noose – artificially-low interest rates allow mortgage brokers and credit card providers to prosper – though, to dispirit another general myth, repayments are relatively low as a percentage of overall income. However, the desire to buy that car or that house to keep up with peers has caused personal economic deficit to balloon. Is our capitalist consumerist tendency eating itself?
In Social Democratic America, Mr Kenworthy points to the failure of American politicians to plug the holes in the public safety net. The traditional scourge of the chattering middle class (the Welfare State) remains woefully inadequate in the US despite renewed government activism on Medicaid, Obamacare, and enhanced social security provision. Middle class households now have a revived interest in such programs; including state pensions and child tax credits. I suggest that state intervention through welfare reform can be regarded as politically ideological – a left-right demarcation – but our author posits that this has been exaggerated. Republicans, for example, would not want a reduction in Medicare or social security handouts, he says. Not even presidential-hopeful Donald Trump? “Yes,” he insists. “Immigration is politically linked with the welfare state”.
Professor Kenworthy lauds Nordic countries such as Sweden, Denmark and Norway as models of civilised, developed societies where immigration and welfare sit comfortably within the social fabric. As capitalism has tended to increase inequality over the centuries, Scandinavia has resisted this bearing with increased tax rates and strong labour unions dampening such trends. So are countries such as America and the UK simply unwilling to moderate income inequality? As the former has one of the lowest levels of intergenerational earning mobility in the affluent world, the author explains that spreading wealth is done miserly and begrudgingly. So how do we shy away from papering over the cracks and confront our collective gluttony?
Mr Kenworthy strongly advocates shared prosperity, essentially through strident government activism on taxes and diminished regulation and restriction on small businesses. So a Blair-Clinton ‘third way’ model, or a consumerist-middle-class-with-a-conscience utopia? He mentions the problematic issue of corporate-funded parental leave, suggesting that this should be provided by the state. It would give the increasingly fluid workforce a greater stake in society and hence create a more equitable system in which benefits are removed from the responsibility of reluctant employers. He goes on to stress that he is not opposed to a strong private contingent in the provision of government services, such as pre-school education, but is unsure at what should be the ‘optimal level’. The decline of labour union reach has made it easier to bring private finance into the public realm, he adds, citing the example of Wisconsin governor Scott Walker’s battle with unions over the pension system, of which he has gained much political headway.
I question Kenworthy’s admiration for Nordic society and whether there is a healthy comparison with the UK and US middle class hegemony. He explains there is a ‘solidaristic’ culture in these European nations, one that cannot be imprinted on other Western societies. The issues of immigration, tax hikes and welfare can be seen from an all-too individualistic, middle class perspective, one that seems to grate with an egalitarian orientation. Deep economic downturns and wars often precipitate a more ‘solidaristic’ attitude, though we have yet to see the fruits of this since 2008/9 – if anything, separatism has been perpetuated rather than reconciled.
I agree with the author’s championing of a fairer society and of greater solidarity within the middle class and without it. I am, however, unconvinced about whether heavy private enterprise involvement is the way to bring about absolute equality of opportunity and prosperity. There must be an obligation to snub the natural instinct of ensuring middle class survival at all costs in favour of assisting the poorest and most destitute at any cost. There exists a toxic aspiration in far too many Western societies, which sees the middle class jousting each other, and those below them, in order to reap the rewards for the ‘yours truly’. Yes, the Nordic countries have been the poster boys for egalitarian culture. But even there income inequality has been rising. Maybe our stifling obsession with the middle class is detrimental to the one attitude progressive democracies should aspire – that a truly collaborative, intrinsically social democratic state would render this discussion, well, in poor class.
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