Compared to most other advanced capitalist countries, the United States is a mess. Our archaic 18th century constitution guarantees legislative deadlock and allows small minorities to block democratic will. Our health care system leaves tens of thousands of people dying every year because they cannot afford treatment, while millions more forego needed care because of the cost. Three hundred million private firearms are in circulation nationwide, perpetuating an ongoing public health crisis that simply would not be tolerated in other wealthy democracies.
In center-left circles, the American dysfunction is widely recognized. What is less well understood is how American society has adapted to this dysfunction and indeed built its institutions on the basis of widespread state and market failure.
This adaptation was revealed with particular clarity by the COVID-19 pandemic. The United States’ political response to the pandemic has hardly been perfect, but it has at times demonstrated what a functioning state could look like in an advanced capitalist society. In the process, he inadvertently sent various systems into a spin.
In California, the reduction in mass incarceration has diminished the state’s firefighting capacity as the state relies on prison labor to put out wildfires. Across the country, the price of used cars has skyrocketed as moratoriums on evictions and government relief checks have eased car loan repayments and reduced repossessions of automobiles, reducing lending costs. supply of used cars. Likewise, a tight labor market and fewer desperate workers have reduced the supply of labor in slaughterhouses and meat packing facilities, leading to higher meat prices for everyone.
When small social improvements cause so much turmoil, we have to ask ourselves: to what extent our economy and our society count on about the dysfunction, and who benefits from the chaos?
The radicalism of the country’s political response to COVID, at least in the American context, remains underestimated across much of the American left. But grasping is crucial to understanding how this response exposed America’s adaptation to dysfunction.
The simple fact is that the economic policy response to COVID – primarily through the CARES law under Trump and the US bailout under Biden – has given Americans a brief glimpse of what successful economic policy really looks like. In 2020, a year of economic upheaval and unprecedented levels of unemployment, poverty in the United States has actually declined. The combination of relief payments, paycheck protection loans, and supercharged unemployment insurance created a situation in which the lives of the poorest Americans actually improved during a recession. In fact, the US response to the crisis stands out internationally for its aggressively egalitarian fiscal response.
Yet these policies, along with others like moratoriums on deportations and prisoner release programs, have in fact created new problems in a society built around widespread failure to provide for its citizens.
In California, this dynamic became apparent relatively early in the crisis, when the state released thousands of prisoners to reduce prison overcrowding during the pandemic. Mass incarceration is, of course, one of the most egregious pathological features of American society. While California sits in the middle of the pack when it comes to incarceration rates among U.S. states, if it were its own country, the state would be among the top ten most jailed companies in the world.
So when the state reduced even slightly its prison ambitions during the pandemic, it threw sand into the gears of some of its institutions which have become dependent on a large prison population. Foremost among them was its ability to fight fires, especially crucial in a state of rapid drying. California relies on inmate firefighters, paid only in dollars a day, to contain the wildfires that ravage its backcountry each summer.
In August 2020, the state was hit by weeks of major wildfires, including the largest such fire ever in the state. The state’s prisoner release policy actually created a shortage of firefighters just when they were needed most. Because the state has adapted to its pathological over-incarceration, any remedy for this pathology is doomed to create problems in other institutions.
A similar dynamic has manifested itself in the used car market. While it is common knowledge that used car prices rose during the pandemic, it is less widely recognized that one of the main reasons was the drop in repossessions of automobiles.
Since even used cars are well beyond the means of many Americans, about two-thirds of all car purchases in the United States are funded by some kind of loan. Over the past decade, auto loans have spread into the subprime market, as financiers embrace the type of risky lending that led to the mortgage crisis in 2008. As a result, around two million cars are foreclosed on by creditors. lenders every year. These cars are then resold by dealerships, forming a crucial part of the used car supply chain.
Auto repossessions actually fell during the pandemic for several reasons. First, the moratorium on evictions meant people could spend more money on their auto loans, as there were no similar protections against auto repossession in most states. Second, the huge sums of relief money paid out meant people had more resources to make their car payments. Finally, the lenders themselves, fearing to burst the bubble of automatic loans that had formed, relaxed repossessions.
As a result, the supply of used cars shrank and prices skyrocketed, just as more and more people started buying cars to avoid public transport during the pandemic. In the United States, the ability of many people to afford a car depends on other people failing to make their payments and, as a result, losing theirs.
The economic recovery that followed the pandemic recession revealed how the labor market, a fundamental institution in any capitalist society, is also built around dysfunction. Thanks to strong US economic policies, the recovery has been exceptionally rapid, gaining ground in months that previous recoveries took years to achieve. As a result, the labor market is now tighter than it has ever been since the “miracle economy” of the late 1990s.
Because workers now have options, employers whose entire business model is based on the underpayment of a desperate workforce run into problems. Domino’s Pizza just announced its first drop in income in over a decade because it can’t find delivery people ready to work for her regular salary. Likewise, slaughterhouses are struggling to find workers willing to brave their notoriously dangerous and abusive conditions for a paycheck. Even a signing bonus of $ 3,000 does not scare away the necessary manpower. As a result, meat prices rise while supply stagnates.
The labor market still depends on what Marx called the “deaf market compulsion” to function. But in the United States, this constraint is particularly brutal. In Denmark, for example, the average wage for meat packers exceeds € 30 per hour. In the United States, the median hourly wage in slaughterhouses is $ 14.
There is nothing inherent in packing meat that makes it a low-paying job. But in the United States, there has always been a constant supply of absolutely desperate workers, and therefore the entire meat packaging industry – like many other industries – is built around exploiting their desperation. When workers become a little less desperate, the industry begins to malfunction, once again demonstrating how key failure is to the system’s success.
These examples highlight an often unrecognized source of difficulties for the left as we seek to build a more humane and functional society. We know it is our responsibility to fight for better pay, options and power for workers. What is less obvious is how our victories can cause their own problems. When markets as essential to the lives of most Americans as the market for meat products start to malfunction because workers are a little less desperate, we should expect the discontent to spread far beyond the employer class.
Indeed, this is already happening. Opinion polls indicate that fear of inflation is rife in American society, despite the fact that economic conditions for most people are much better than they have been for decades. (Of course, the fact that most of the media is running out of steam to run any story they can find stoking inflation fears, no matter how ludicrous, certainly doesn’t help.) If this modest retirement From the barbarism caused by a tight labor market prompted this response, one can only imagine the discontent that genuinely civilizing reforms would bring in their wake. It is this dynamic, in which the markets protect themselves by punishing those who get involved, that has led political scientist Charles Lindblom to call the market a prison.
But as the example of countries like Denmark suggests, prison breakouts are possible. States can adopt reforms that disrupt functioning institutions when they fail and can maintain those reforms in the face of unavoidable reactions.
The key to resisting this backlash is class consciousness. In the United States, class consciousness is extremely low. People are much more likely to think of themselves as meat eaters or used car buyers than as workers. But it is only when people identify as workers, and see their plight as tied to that of all workers, that they can be persuaded that soaring meat prices or long waits for Pizza delivery are not problems to worry about but rather signs. that the class as a whole is gaining ground.
There is no way around class consciousness for those who hope to civilize American society. Institutions large and small have adapted to the pervasive dysfunction and misery in this country, and attempts to address this will undoubtedly disrupt these institutions. This disruption threatens the viability of remedies. Only a political coalition that convinces large numbers of Americans to view their interests as workers rather than consumers can provide the stability needed to weather the storm.