Forbidden Fruit: Domestic Reconstruction


In their 1966 classic, Monopoly Capital: An Essay on the American Economic and Social Order, economists Paul A. Baran and Paul M. Sweezy explained how corporate capitalism restrains public spending even as it grows increasingly dependent on it.  The problem, Baran and Sweezy noted, is that, from the perspective of the investing class, only certain forms of government spending are tolerable.  The sorting mechanism, argued Baran and Sweezy, is “the stability and cohesiveness of the country’s class structure.”  And, thanks to their very usefulness and economy:

[M]ost governmental activities designed to satisfy collective needs involve either competition with private interests or injury to the class position and privileges of the oligarchy, and…for these reasons opoosition is quickly aroused and rapidly reinforced.

Whenever a possible avenue for public spending threatens established investor interests, Baran and Sweezy predicted that “roadblocks” would “be encountered long before socially rational and desirable goals have been attained.”

What kinds of spending, meanwhile, could make it past the roadblocks and become actual, relatively unchecked government projects?  The answer, according to Baran and Sweezy, is spending that “neither creates nor involves competition with private enterprise,” either economically (in terms of sales) or ideologically (by undermining the system’s core dogmas).

One of the prime forms of public spending that does pass the corporate capitalist roadblock, Baran and Sweezy observed, is military spending.  On the economic/sales side:

There are no private military establishments with a vested interest in keeping the government out of their preserves; and the military plays the role of an ideal customer for private business, spending billions of dollars annually on terms that are most favorable to the sellers.  Since a large part of the required capital has no alternative use, its cost is commonly included in the price of the end product.

Meanwhile, on the ideological side, business interests don’t at all dislike military spending’s ideological impetus:

[M]ilitarization fosters all the reactionary and irrational forces in society, and inhibits or kills everything progressive and humane.  Blind respect is engendered for authority; attitudes of docility and conformity are taught and enforced; dissent is treated as unpatriotic or even treasonable.  In such an atmosphere, the oligarchy feels that its moral authority and material position are secure.

So, why do I mention this classic, largely (and extremely foolishly) forgotten social-science prediction? The answer is this recent blog comment by Stephen M. Walt (yes, THAT Stephen M. Walt), who writes:

I was struck by Louis Uchitelle’s article in the Sunday NY Times on the dearth of big public works projects here in the United States. “For the first time in memory, the nation has no outsize public works project under way,” he says, and then reports that:

Some economists argue that the continual construction of new megaprojects adds a quarter of a percentage point or more, on average, to the gross domestic product over the long term. Again, cause and effect aren’t clear, but the strongest periods of economic growth in America have generally coincided with big outlays for new public works and the transformations they bring once completed.”

One might add that we aren’t spending enough to maintain our existing public infrastructure, and state and local governments across the country are facing deep budget deficits (and in some cases, a very real risk of bankruptcy).

But it’s not as though the United States hasn’t started some big public works projects over the past decade or so; it just hasn’t been doing them here at home. We’ve spent billions constructing military bases in Iraq and Afghanistan, for example, and another billion or more on a giant embassy in Baghdad and another one in Pakistan. Needless to say, those “public works” projects are a drain on the U.S. economy rather than a source of additional productivity.

As I’ve said before, Americans have come to believe that spending government revenues on U.S. citizens here at home is usually a bad thing and should be viewed with suspicion, but spending billions on vast social engineering projects overseas is the hallmark of patriotism and should never be questioned. This position makes no sense, but it is hard to think of a prominent U.S. leader who is making an explicit case for doing somewhat less abroad so that we can afford to build a better future here at home.

It is indeed hard to think of a prominent leader who is making a case for screamingly obvious public works projects here at home.  That’s because, promise of “change” notwithstanding, THERE ARE NONE.

For the exact reasons Baran and Sweezy named over 40 years ago, major, screamingly obvious public works projects are doubly forbidden here in “the land of the free.”  Despite their huge economic and ecological benefits, things like building a genuinely modern railroad infrastructure and reconstructing our cities and towns to emphasize cycling and walking are both bad for private business sales and ideologically dangerous.

Modern, comfortable, reliable trains and walkable, sociable towns would not only kill the car business, but would require comparatively little upkeep, once finished.

Meanwhile, what might the public conclude if it had blatant evidence that 23.7 trillion dollars could do something rather more helpful than restoring Wall Street bonuses and refueling Detroit marketing machines?