American Foreign Policy at Home and Abroad: It's About the Middle Class
We've talked on this blog about a progressive foreign policy(PFP). Let's 'fess up- a PFP should focus on the middle classes, broadly defined. That includes the rising and newly assertive ‘global middle class countries’ in the global system; the rising middle classes inside other countries; and keeping the American middle class afloat in our own country. So what would a progressive middle class foreign policy consist of?
The first piece of a progressive foreign policy should help the American middle class protect its jobs and standards of living by providing adjustment assistance in the face of the growing costs of globalization.
Globalization is only good for the American middle class if our communities agree to allocate real resources to help people make necessary adjustments when unemployment threatens as jobs move overseas, or as wages fall. That means more money for education, money for re-training, money to move from one region to another, and so forth. Today, we give federal money via tax breaks to firms that export jobs and provide astronomical salaries to underperforming executives. Surely a better use of public resources is to give direct help to middle class Americans anxious to gain new skills and knowledge to provide a better life for themselves and their children. It really isn't rocket science - in a knowledge economy, if you educate more people, you are more successful as a nation both domestically and in your international standing.
The second piece of a progressive middle class foreign policy (I know, not a pretty term, but we can work on the euphonics later) is to promote the rise of middle classes around the world. It brings all sorts of benefits. -- enhances the chances of stable democracy; promotes stability; less likelihood for conflict; they can buy our exports.
Third, pay more attention to what I term the Global Middle Class Countries (GMC2) like India, Brazil, Nigeria, Mexico, who are ‘middle’ in the sense they occupy strategic positions between the have-nots and the have-lots, and are important for American interests around the world.
There are problems with this approach – maybe it shifts too much attention from the very poor; and it sounds sort of elitist. However, poor countries and poor people are hardly at the center of our policies these days, neither at home nor abroad. And one would give a broad compass to the term 'middle class'. Also, it makes explicit what is whispered in our soft diplomacy and in the regular kind (think Fulbrights).
Despite the problems, maybe we should be more honest about what we are seeking in the world and at home – good ol’ bourgeois values of stability, fairness, and economic opportunities. And if the size of the middle classes continue to shrink in developing regions like Latin America and developed ones like the U.S. I can guarantee you that stability and fairness will be replaced by far less desirable conditions.
At a minimum, a broke, angry, increasinlgly underemployed and resentful American population is unlikely to support a progressive foreign policy of any stripe. So maybe “expanding the middle classes at home and abroad” ain’t such a bad slogan for a progressive foreign policy. After all, it's certainly better than the current one - "support the super-rich at home and abroad."
Clearly the chore of reducing the wealth gap becomes less paramount if the middle class (working class) can be improved.
The question, then, is where does the money to assist the middle class in its needed "adjustments" come from? Federal taxes? State taxes? Both?
I've always decried Federal tax increases while praising increased state taxation. Like education or healthcare, can there ever be a Federal "one size fits all" piece of legislation that aggressively seeks to decrease the various financial burdens facing our middle class?
Don't get me wrong, your ideas here are good ones. Perhaps the best way to help people is to start small, at the state level.
October 3, 2006 7:05 PM | Reply | Permalink
Dr. Wilson,
I have to admit that I get uneasy when I hear everything reduced to the "middle class". Although I appreciate your recognition that consistantly catering to people who consider themselves middle class is heartless to those in the working class and the underclass it still grates me to hear people go on about it. Of course, my discomfort is no reason to ignore my assertion that true democracy can only work effectively where the middle class and a supportive working class form a majority.
Taking that assertion for granted it seems to reason that effective democracy promotion would begin with policies to expand these two types of citizen groups. The middle class, the group that wants democracy because they are comfortable enough to desire power rather than concentrate on survival but are not yet in the functional aristocracy needs to be expanded while the working class has to be assured that their personal security is not threatened by the movement of power to representatives drawn from those middle and upper classes.
If the working class is comfortable it should throw its lot in with the middle class. If the two classes form a plurality than the kind of targeted revenue projects needed to grow economically can succeed in a democratic government. If the working class feels threatened then they will likely through their lot in with the underclass, demanding the kind of social agenda that keeps public revenues spread thin and keeps the economy stagnant. If an unsatisfied working class and the underclass form the plurality than either democracy will be unsatisfying both to us and to the country in question, or the will of that plurality has to be suppressed by non-democratic means in order to execute long range goals at the expense of short term alleviation. The good news is that if long-term strongmen can plan well and keep corruption limited (when compared to actual production) then eventually the middle class does grow and the working class does become relatively satisfied and you get a Germany, a Japan or a South Korea where democracy really can succeed over the long haul.
The countries that you refer to as the middle class countries are the very countries where that ideal plurality either exists or at least it's not a pipedream. And I have to agree that these are places where promoters of democracy ought to concentrate simply because these are the places where they have the best chance of success. We must be careful however because some of these countries, like China, Cuba and even Iran, have non-democratic governments that are moderately to substantially legitimate to their public and overly aggressive promotion of our ideals will move the working classes in those and similar countries towards nationalism and away from democracy. Notwithstanding other issues, it would be better to let those countries come in on their own terms and concentrate instead on cleaning up our image from previous clumsy attempts at aggressive democracy promotion so that those working classes don't feel threatened by us and the all things we represent.
One other bit of importance. We shouldn't assume that because all the folks we know from a country are middle class, especially if they are in exile, that the middle class of a country is strong enough to impose a middle class led democracy. The middle class can and will lead an effective democracy but it cannot legitimate a democracy. It is my belief that legitimizing a regime is the perogative of the working class and effective democracy promotion has to take this into account.
As for some of the problems in our country, our working class has been largely relegated to poverty and the middle class is following on its heels. If the underclass ever becomes the majority than our democracy is toast. I've gone over different scenarios repeatedly in my head. As it is I'm currently outside of the academic world so my "solutions" have lacked the criticism of experts necessary to fine tune or ash-can them appropriately. I have ideas, but some of them are pretty radical and I don't want to lay them out here now. The main things we have to be on guard for are revenue isolation and widening (or maintaining) of the materialism gap between American consumers and others and an overstrong American currency… issues for another day. I also think labor organizations might benefit from a shift in strategy.
I personally find democracy less important than happiness, satisfaction and peacable coexistense. Where democracy can best contribute to these ideals, I'm all for it. I wish the promoters of democracy luck where it truly is in the benefit of the people it's supposed to help. Maybe one day that will be everyone… though I'm not yet convinced.
October 3, 2006 10:02 PM | Reply | Permalink
AF-
Points well taken. Key is not to cater to the current middle classes in developing societies, but to promote foreign policies that help the middle classes expand.
The call is not to abandon the poor, but to include more policies that recognize that a growing middle class at home and abroad is also a good thing for American interests.
Gettysburg also -
Selecting national, state or local levels as source of revenues and implementation is important. But developing the political will at all levels to take these steps, including overcoming the cowardly ambivalence of the political leadershp, is even more important. Without leadership and a growing constituency, it won't happen.
October 4, 2006 3:34 AM | Reply | Permalink
The post and both comments are thoughtful, but all make me uncomfortable. I'll give each a separate comment. Gettysburg advocates more shift of the tax burden to local decisions. But, first, in context of the post, it seems to require local control of foreign policy, which is impossible (and possibly unconstitutional anyhow).
Also, let's not idealize local policy. Give or take the GOP's supply side, federal taxes are a progressive income tax; state and local revenues are weighted toward (regressive) sales taxes and property taxes (which often fund districts so as to increase inequality, as with education).
Finally, if Congress directs revenues toward pork, you ain't seen nothing yet when it comes to, say, diversion of revenues in my own state (New York) from urban taxpayers to minor upstate projects.
John
http://www.haberarts.com/
October 5, 2006 8:30 AM | Reply | Permalink
So, onward. I'm having trouble following Alan's post, perhaps because it alludes heavily to things he doesn't yet wish to publish. So I hesitate to reply, but this in particular bothers me: "If the working class feels threatened then they will likely through their lot in with the underclass, demanding the kind of social agenda that keeps public revenues spread thin and keeps the economy stagnant."
First, it suggests a free-market policy, in which government spending is a recipe for stagnation. I see no evidence of that. Macroeconomics or even GOP handouts to the wealthy still have enough Keynes in them to believe that people without money to spend as consumers drag down the economy. So do people without education, rotting inner cities, lack of nationwide infrastructure, and so on.
Second, it's wrong on the political dynamics. When the working class feels confident, divisive politics is harder to pull off, true, but most often that divisiveness pits the working class against the poor and the middle class against both. One reason people don't rebel as loudly against handouts for the wealthy is that they can still be made to see tax cuts as part of their alliance with the wealthy to keep them afloat, as opposed to the undeserving poor taking money out of their pockets.
John
http://www.haberarts.com/
October 5, 2006 8:38 AM | Reply | Permalink
So last, the post. I'd love to see Ernest Wilson amplify it, since I can't yet follow what he's advocating. What does he mean by supporting the middle class abroad? Mostly I'm left with this warm, hazy glow of hoping that we'll be more pro-business and free trade rather than dumping all our money into feeding the poor and giving them mosquito netting?
Of course, if that's the idea, I'm duly opposed. First, I don't see us as doing much in terms of foreign aid. Second, I'm a free trader but worried that we're doing nothing to ensure that WTO, the US, and others are managing this in the least to build up local economies or to protect, say, those outside the privileged enclaves in India benefitting fabulously from computer companies. Third, I get the feeling from studies that critique foreign aid that the problem is stemming corruption, tyranny, and outright bloodshed that create insecurity, not too much attention to disese and starving children.
The post also has an unsettling echo for me of Thomas Friedman in its first prescription, retraining. It sounds again like the casual sop he throws out to appease the losers from free trade, one designed to do as little as possible to address actual problems or to do anything halfway governmental. It maintains the myth that outsourcing is caused by vastly superior education in those Indian programmers rather than their willingness to work for a tenth the money. It also glibly assumes that someone displaced from the middle class in midlife can, say, go back, earn a PhD, and thus compete in the marketplace with someone right out of school. It ain't going to happe, and there have to be better solutions.
So if the post is worried it might seen uncaring, darn right. It is.
John
http://www.haberarts.com/
October 5, 2006 8:48 AM | Reply | Permalink
What is the middle class, "broadly defined"?
Are we conflating economic status with economic function? A shopkeeper is a member of the middle class by definition in classic economic theory; a programmer at a fortune 500 hi tech is a member of the working class by the same standard, even though the programmer might make $100,000 a year and the shopkeeper $100,000 a year.
It seems to me the distinction is important because it tells us something about the differences in economic interests the two have.
A shopkeeper, for example, benefits from tax bills that emphasize deductions for business-related expenses. The programmer doesn't. The shopkeeper benefits from an oversupply of labor because it drives employment costs down; the programmer benefits from an undersupply of programmers since it drives programmer wages up.
Lumping the two together as members of a "middle class" because their gross income is comparable doesn't seem particularly useful if we are discussing appropriate economic policies to promote "middle class" interests.
Just asking.
October 5, 2006 2:57 PM | Reply | Permalink
OmahaSlim
I will leave it to the experts to define exactly what "Middle Class" means, but I can assure you that we do not want the United States as a whole to turn into Los Angeles (where I live).
L.A. is notorious for having no Middle Class (whatever it means). Here you have the wealthy who own land in the hills or elsewhere (land, of course, is much more valuable here than the actual home--no matter how ornate the structure), and then you have everyone else: poor Mexicans, poor young white kids (starving artists like myself), and poor working class folk.
There is no in between. Unfortunately, it seems as if the U.S. as a whole has been slowly morphing into one great Los Angeles during the Bush years (which is bad because I might not want to live in this city forever, most don't).
I think we need to listen to Ernest on this one. The question, of course, is where does the funding come from to bolster the "Middle Class?"
October 5, 2006 7:36 PM | Reply | Permalink
Thank you for replying. And being that I am neither now nor have I ever been in any position to publish anything I am delighted by the mere suggestion that I may be publishing something and take it as a great compliment.
The best examples I can think of of populist democracies that followed the wishes of the poorer classes leading towards ineficient economies which many free-market gurus liked to use as poster children of failure are Nyerere's Tanzania and Cold-War-Era India. My own feeling is that Nyerera's Tanzania was far from a failure as it kept everyone fed with a small modicum of prosperity which shone bright in 60's and 70's Sub-Saharan Africa. I know less about India but it strikes me then and now as a basket case despite it being the darling of modern-day free marketeers with its obscene glut of workers and practically no regulations.
There are also non-democratic populist nations whose economies move slower because of inefficiencies most notably Cuba.
This is not to say that I don't admire the goals of these societies. I am a strong believer in social and equitable governance but the existence of free-wheeling systems and the efficiencies created by exploitation and survival instincts makes those systems feel stagnant.
As to the second point, working class members are likely to move against the poor who you suggest they view as people taking money out of their pockets if they feel like there is an effective barrier between themselves and utter poverty. This could be a social spending program or a faith in the idea that so long as they are willing to work hard that they won't starve. When that barrier breaks, the poor cease to be the enemy. People who know poor people, especially if they weren't always poor, begin to sympathize with them, and fear they may become one with them. This usually accompanies a growing in the ranks of the poor, and a growth in the percentage of new poor who are looking to do something about it.
I admit I don't have a lot to back all this up and I like talking out of my ear. I doubt I've sufficiently addressed your concerns but I'm probably wrong anyway. Thanks for posting though.
October 11, 2006 6:03 PM | Reply | Permalink