Peter Suderman of Reason was on Up with Chris Hayes this morning, making the libertarian argument in support of Walmart. He summarized his argument in Tweet form, which has been helpfully aggregated here. (Ignore the herp-de-derp headline attached.) Suderman is no phony, and when he speaks about the greater good for the working poor, I know he means it. But I think there are deep problems with his take.
I'll farm out the economics to the great Doug Henwood. Henwood injects some numbers that can't be perceived as anything but a disaster for retail workers and which significantly damage Suderman's point. Surely, whatever damage slightly higher prices at Walmart might cause to the working poor, it's nothing compared to the relentless downward pressure on wages. I will also point out that a huge amount of mental work is being left out of Suderman's Twitter argument in the vague Tweet #9, which states that raising prices cuts into the low-price benefit of Walmart for poor consumers. The essential question is to what degree and what practical effect?
More generally, though, I wonder what Suderman thinks of the essential plight of the working poor-- the plain fact that a very large portion of this country cannot subsist on the wages they earn. I invite anyone to do the math on a lifestyle lived at the current poverty line of $23,050 for a family of four. Even if you assume that people in such households live like monks, the numbers simply don't add up, particularly for those millions of Americans who live without access to any workable public transportation. The work of people like Barbara Ehrenreich has helped to convey some of this reality (and has met with considerable pushback from those who would prefer not to hear about it). Contributing to this problem is the federal minimum wage, which is now at an inflation-adjusted level below that of the minimum wage in 1968. In no state can a worker making the federal minimum wage at 40 hours a week afford to rent a two bedroom apartment at fair market rent. It's essentially impossible to afford payments, insurance, and gas on even the cheapest cars while feeding four and renting a modest important. What we consider basic elements of even working class lifestyle have become unreachable for millions.
What I would fear, were I a libertarian like Peter, is whether I was in fact hurting libertarianism in supporting a status quo that has become inimical to the basic American social contract. I suppose there's no reason to think that systemic change is going to come anytime soon. But our economic system is underwritten by the assumption that if you're willing to work you can at least ensure your own material security, and in the typical telling, gradually improve the quality of your life. Let's leave the middle class alone for now. I cannot imagine an honest observer who could conclude that this social contract is currently being fulfilled for those at the bottom of the income spectrum. We're all aware of the growing sense within this country that playing by the rules is no longer rewarded, that the system is failing for everyone but those at the top. Perhaps this sentiment will be directed in a way that brings us closer to libertarian principles, but I doubt it.
For Ezra Klein, who appears to be pulling the full David Broder these days, there are at least some outs. The social welfare state can be expanded, whether through indirect subsidy such as expanded public transportation (hugely important to the working poor) or direct payments. You fund such things through raising taxes on the rich, who now pay historically low rates and can afford it many times over. It's classic pity charity liberalism, and it makes our working poor even more subject to the vicissitudes of politics, and does nothing to make workers better able to redress grievances with their employers. But it's something, it's a way forward. As a bonus for Klein, it's the kind of mushy centrism that he seems to equate with seriousness these days.
What is Suderman's path forward? He's opposed to Obamacare, which makes a very real difference for the affordability of medical care for the poor. (Obamacare is his main beat at Reason.) I imagine that he's opposed to major public investment in public transportation. I'm damn sure he's opposed to higher corporate, capital gains, and upper income tax increases to fund redistributive programs. The working poor pay no income taxes and pay paltry sums in payroll taxes, cutting which would not have anything like the net positive impact as increasing money for food stamps or rent subsidies. I can only guess that Suderman's plan would involve the typical notions of a rising tide lifting all boats, that if we cut taxes and regulation the economy will grow and improve the stock of those on the bottom. But look again at Henwood's chart. That collapse for retail wages reflects the overall trend in wages across decades-- decades that correspond with a prolonged period of deregulation and tax cuts at the top. What is so strange about the notion that cutting taxes and regulation will improve wages for the rest of us is that we've been doing that for decades and seeing the opposite effect.
I said before that Suderman does care about retail's impact on the poor, and I do mean it. I wouldn't suggest otherwise. Indeed, if I were to suggest otherwise, the trend now would be to accuse me of the worst kind of political ugliness. But reflect on what that means for a moment. For a long period of time, it was acceptable to take the Gordon Gekko line, to believe in a kind of survival of the fittest where capitalist society had no particular obligation to support those on the bottom. That's changed to the point where even the followers of Ayn Rand typically argue that their position is the position that actually helps the poor. That represents progress. But it muddies the waters a great deal, and it forces writers like Suderman to bend themselves into pretzels. This happens all the time in his reporting on Obamacare; he has many critiques of the legislation, some of them convincing. But he has no meaningful alternative, and also understands that he can't argue that sick people should just die, even if he wanted to. So there are weird gaps in a lot of his voluminous output on the subject. Those kind of gymnastics have become commonplace in conservative economic discussion, where everyone must assert the importance of helping the poor while they minimize their plight or actively work against programs to improve it.
I like a guy like Peter Suderman a lot more than I like the Gordon Gekko, fuck-the-poor types. But I understand them more, and I think there's more internal coherence to what they advocate. From a more concrete perspective, I think that the growing failure of the American system to fulfill our social contract is a problem for all ideologies, but particularly for those whose policy options are limited to tax cuts and deregulation. And a part of me believes that libertarian antipathy towards unions-- what the Walmart fight is really about, after all-- has been a profound strategic mistake, to say nothing of a real disappointment. Because the gaps that were once filled by unions look to be increasingly filled by government.Our social compact is a powerful thing, and you underestimate our desire to ensure it at your own peril.
Stripped away all the politics, and you can still see a basic problem: we can't have the kind of society we say we want to have when so much of the resources have been captured by so few. The system is not working for too many people, and the long term effects of that breakdown might be severe. I've got ideas to change things. I'm not sure if everyone does, not really.