|Quarterly Journal of Economics|
Creating Ideological Change
How did one of the most democratic of nations—or at least, the nation most vocal in asserting its claim of democracy—revert to such extremes of inequality? Deregulation helped, but one major orchestrated shift in ideology took center stage.
For the U.S. middle class whose incomes rose in the Great Compression, this was a time of opportunity: families bought homes and cars, and children went to college; jobs paid a living wage. The economic difference between managers and workers decreased, so that managers were not all that much better off than the workers who labored under their rule; after overtime, some managers earned less.
For those at the top, this situation was intolerable. To restore business advantage they could no longer, at least in the United States, rely on the violence with which privately hired Pinkertons earlier complemented municipal police. A new strategy was required: corporate insiders turned to higher education to provide a new, more durable basis for broad economic, political and ideological change.
Starting in the 1950s, business education grew. Business bachelor’s degrees increased to 20.5% of 2012 undergraduate degrees awarded. Production of MBAs accelerated even more steeply, from 3,280 in 1956 to 191,571 in 2012, when the MBA took 25.4% of all master’s degrees. The business class was building a stronger, more resilient foundation for its domination of American income and wealth.
Higher education during the second half of the twentieth century exploded across the board, with degrees in the humanities, engineering, and the sciences all exhibiting robust growth. Business, however, took larger and larger educational shares.
Students learn more from their professors than facts in the text. Social codes tell people how they are supposed to act, think, and interact with each other; management education in particular shapes who business students become. Business students become business leaders, carrying forward the ideological standpoint of this re-emergent business class.
Most importantly, this group accomplished a shift in acceptance of inequality. Repeated reference to “free markets” conflates that phrase with “freedom,” a contradiction in terms. Democratic freedom is a state establishment of free speech, free association, generally free behavior, and free votes. Market fundamentalism’s “free markets” explicitly reject the very regulatory oversights that democratic states need in order to limit corporate corruption, discrimination, environmental degradation, and gross exploitation of labor for extreme profit.
That business faculty hold views favoring inequality is documented in a survey I conducted in 2009, answered by some 750 faculty employed in major research university business schools and by some 1,325 faculty employed in those same major research universities in other academic fields. Business faculty hold views that are remarkably more sexist than their non-business colleagues, are more racist, and favor higher levels of corruption, including direct bribes. Business faculty are more supportive of telling everyday lies than faculty in other fields. High-status students in these major universities carry this ideology forward, until across the United States today, much of our entire population accepts poverty as a consequence of laziness, and economic privilege and wealth as earned.
Good for Business, Bad for Democracy
Extracting wealth from the work force to enrich those at the very top is bad national policy. The wealthy spend less of their income on products and services; they save more, transferring much of that wealth to foreign tax havens.
The rightward ideological shift toward market fundamentalism creates problems for practical democracy too, particularly democratic ideals. Business corporations are “people” in domestic rights, and more than people in trade agreements, starting with the North American Free Trade Agreement (NAFTA). Under NAFTA, corporations are permitted to sue nations for loss of potential profit decreased by regulations protecting towns, people, and the environment. The 2013 train crash in Quebec province, where Bakken crude exploded, burning a town and killing more than 45 people, occurred along that urban route only after Canada had been forced under NAFTA to abandon requirements that dangerous cargo use a longer, less populated track because those extra miles added costs, decreasing profit. Money buys this.
Political democracy cannot survive when bribes of $1.6 million are made legal.
Some 69% of Americans see inequality as a problem that the U.S. government should do “some” or “a lot” to fix. People are not sheep, but they don’t always vote. If extreme inequality is to be curbed, we need a vast electoral turnout now.
Candidates who oppose extremes of inequality and are willing to tax the rich must be provided with at least some funds as well as scores of volunteers to carry the message that our ideology of economic, as well as political, democracy lives on.
For the moment, votes still carry the day.
|Janet Spitz, a DSA member, holds a PhD from Stanford University and is associate professor of business at the College of Saint Rose in Albany, NY, where she can be reached at firstname.lastname@example.org.|
Individually signed posts do not necessarily reflect the views of DSA as an organization or its leadership. Democratic Left blog post submission guidelines can be found here.This article originally appeared in the spring 2015 issue of the Democratic Left magazine.
Great post that brings together a lot of the data and analyses that have been developing over the years. Looking forward to talking/working with you more on the issue of inequality.