A recent article in the New York Times describes how Democrats are providing companies with incentives – to hire union members – a sweet neoliberal euphemism for legal bribes to business. Read carefully it can tell us much about the essence of contemporary capitalism, its relationship to the state, the importance of democracy, and the absurdity of the neoliberal mantra of a self-regulating marketplace that dominates most discussions of the economy.

The Times article outlines how President Biden’s economic plan is taking the American political economy in a new direction that gives organized labor a bigger role. The program includes a $1 trillion infrastructure bill; the Inflation reduction Act, which included $370 billion to combat climate change; and another $280 billion for Chips and Science, a measure dedicated to revitalizing the semi-conductor industry. All have provisions to pay union wages and provide tax benefits for companies using apprenticeship programs, hiring local workers, and utilizing clean energy.  Its basic thrust is to revitalize the US industrial base and its labor force, each essential to the rapid development of advanced technology. The effort displays an essential truth: as capitalism changes, its future is not predetermined. There’s nothing inevitable about our current path. Gross inequalities of super-profit financialization, low pay service jobs or no-pay automation are not our only options.

Right-wingers make their usual claims that Biden’s approach plan muddles the sacrosanct workings of the market, exacerbates inflation, and runs up the deficit through wasteful spending. The left rightly complains that Biden’s program doesn’t go far enough. Not only does it strengthen the national security state, Biden’s plan is limited, covering only union labor. It bypasses the bulk of the working class – unorganized workers. But the key point is that the Biden is repudiating neoliberalism. The plan shows that capitalism isn’t governed by some self-regulating invisible hand. Instead, it’s shaped by the decisions, policies, and choices of those who govern its key institutions, corporate and state. During the mid-1970’s economic crisis, neo-liberal elites didn’t wait for market forces to magically change things their way. They made decisions. They willfully abandoned the industrial base and broke industrial unions. Corporate chieftains like General Electric’s Jack Welsh claimed that corporations owed their allegiance to stockholders, not employees or communities. Following this dictum, corporations unleashed a war on unions, increased outsourcing, closed domestic plants, and invested overseas. America’s political state expedited this process through its anti-labor policies and tax laws favorable to capital. The resulting deindustrialization was not a natural result of market forces; it was a policy of class war against labor and the welfare-state. It drastically changed the structure of American capitalism. And it left the working class to drink a witches’ brew of opioids, frustration, and fury.

Corporations and banks have historically shaped and supported capitalism with the help of the state. But, whether the slanting of that support favors capital alone or is designed to reapportion at least some rights, power and income to the working and middle class is the jugular political question. The political state is a different kind of institution. Unlike the others, the state is subject to popular sovereignty – the vote – and it can, when pressed hard enough, respond to political pressures generated by voters. As Marx insisted, the political struggle to shape the economy is nothing less than a fight for democracy. That is exactly why neo-liberals see democracy as the leading threat to their power. Their claim of a self-regulating market obscures the fact that institutions and policy decisions shape the economy, not some invisible hand. The idea of a “free market” is a nonsensical obfuscation that gives the commanders of capital and state free reign to neutralize democracy and promote the interests of capital while excluding all other voices. The Left’s goal must be to make sure these decisions are made within a democratic framework. Getting rid of the idea that capitalism changes itself is crucial to widening the democratic struggle over the future of the economy and the people whose labor makes it tick.

---