Time Bomb

238 years after its first birthday, America is in deep denial.
By JEDEDIAH PURDY

Because American politics is both divided and ineffective, it’s easy to assume that divisiveness is the problem, and being nicer and more cooperative would make government work again. Especially on occasions like the Fourth of July, the temptation is strong to hold hands and call, earnestly, for bipartisan comity. Can’t we all just get along?
No, we can’t—even though much of our partisan division is superficial. The more basic problem is denial. Like a dysfunctional family writ across a continent, we Americans have learned to look away from some of our hardest problems, such as inequality and climate change, and, when confronted with them, wring our hands and pretend there’s nothing we can do—even when we pretend to be making a fuss about them.
Part of the reason for the denial is that doing something meaningful about these problems would deepen our conflict. It would reveal a country divided by material interests, not just partisan rhetoric and style. It would raise the stakes of politics. This is risky, but the chance might open the door to a more hopeful politics.
Talk about embracing conflict seems divisive, which is automatically taken as a bad thing these days. But division as such is not a bad thing. Cultural vitriol stirred up by cynical posturing—that is a bad thing. Much Washington partisanship is tactical, positioning the team to take another increment of power. Much popular partisanship is a matter of culture and identity—where you get your news, what kind of tone you use when pronouncing President Obama’s name, which kinds of people you wish your children or siblings wouldn’t date.
But the actual scope of disagreement in our so-called polarized time is nothing compared with the issues that divided the country during the debates over slavery, the labor-capital clashes of the Populist and Progressive eras, the same again during the New Deal or the battles of the Civil Rights era. Conservative opponents accused Franklin D. Roosevelt of taking the country down the road to fascism, with considerably more conviction than Republicans’ insincere warnings against “socialism” today. One hundred and one senators and congressmen signed the 1956 Southern Manifesto denouncing Brown v. Board of Education and defending segregation. Those were divisions worth braving. By comparison, our civic mutual loathing is a tempest in a pisspot.
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So why am I calling for conflict—real conflict, not its facsimile? Because the United States got two big doses of reality in the last six months. One was the explosive arrival of Thomas Piketty’s finding that inequality is vast and that we are headed toward a second Gilded Age, if we aren’t there already.
The other was the new set of U.N. reports on climate change, which confirmed, yet again, that the problem is real and accelerating. Happy developments like President Obama’s new greenhouse-gas rules and California’s pioneering climate legislation amount to spitting in the wind. Half of the total greenhouse-gas emissions in human history have happened just since 1970, and, growing at 2 percent a year, annual global emissions are set to double between now and 2050.Everything hard, from drought to floods to disease, is going to get worse, and, like all natural disaster, it’s going to be hardest on those who are already poor and vulnerable.
Both pieces of news ran right into a familiar politics of denial: the explicit climate-change denial that much of the Republican Party has made its specialty and the faux-outraged cries of “class warfare” that still greet factual reports on inequality.
But this is froth compared with the real denial. The real denial is structural, not rhetorical. It’s made up of policies that conceal difficulties and conflicts. This is the denial that we have to overcome in order to come to grips with the problems.
Climate denial is structural as long as the economy’s everyday feedback system, the price system, treats fossil-fuel emissions as free. We are running a carbon deficit that there is no way to repay. Like any unsustainable debt, our carbon deficit makes the borrowers feel richer than they really are, until it falls due and they are suddenly poor again—plus interest. We are greatly inflating the level of industrial activity the Earth can afford, ecologically speaking.
What about structural denial of inequality? Here the trick is actual economic debt. As Piketty and other researchers have pointed out, much of the growth in total social wealth in recent decades has gone to the very highest earners and the very wealthy—top executives and those who hold large amounts of capital. Ordinary people have seen their incomes stagnate while returns to capital, especially elite capital, grow.
Jedediah Purdy is Everett professor of law at Duke Law School.


Why have people tolerated this? Wolfgang Streeck, one of the most trenchant observers of Europe’s fiscal crisis, argues that policymakers have papered over growing inequality by engineering a series of bubbles. The housing boom, inflated by extremely low interest rates and deregulated financial markets, made people feel richer than they were for some years. Before that, a burst of private credit, aidedby deregulation and low rates, had the same unsustainable stimulus effect. Throughout, deficit spending has propped up tax cuts (another way to give people more money in the short run than they can have in the long run), military and “homeland security” spending, and, in general, massive public borrowing against the future.
This bubble economy replaced a mid-century arrangement that was much more candid about distributive conflicts. The National Labor Relations Act and other collective-bargaining laws assumed that labor and capital (represented by management) had competing and partly irreconcilable interests. These laws tried provided frameworks for orderly conflict in which the different sides could fight out their differences. It was very far from being a perfect world, but working people got a large enough share of real economic growth that no bubbles were necessary.
This kind of candidly distributive politics has been seriously unfashionable in respectable circles, where the way to show you are a political grownup is by talking in terms of total wealth, the national interest, overall welfare—something we can all get behind. When extended to unsustainable deficits, this produces austerity talk—calls for “shared sacrifice” when the bills come due. On the right, these calls come from deficit hawks. On the left, they come from climate activists who understand that energy has to become much more expensive before renewable sources make it permanently cheaper, and that in the transition we may need to rethink highways, personal cars, flying for business and much else that we take for granted.
What’s wrong with austerity talk? It ignores that when national debts—economic or ecological—fall due, who will pay the piper is a distributive question, which means that austerity ends up concealing political decisions about who takes the pain. Austerity talk treats national debts like a household’s credit-card debts: In practice, “We will all have to tighten our belts” means cuts in health care and pensions. For ecological debts, the worst case is even worse than this: Nature collects the unpaid bills directly, with climate-driven disasters that fall on the poor and socially vulnerable.
The alternative to austerity talk is a politics that grasps the nettle of distribution. European austerity has amounted to strapping, and sometimes stripping, the postwar welfare state while ensuring that bondholders get their share of the next 20 years of national wealth. By the time a country reaches that point, either the battles are rearguard—saving what you can save—or the measures are desperate—dropping the euro, as Greece’s left-wing Syriza party proposed when it came close to winning a post-crisis national election.
Rejecting the politics of denial before things get more desperate would mean embracing a politics of conflict, a politics that recognizes the legitimacy and persistence of competing interests. Economic inequality is not just an unfortunate trend that is happening to all of us; it is deprivation, and sometimes exploitation, that is harming some of us and, often enough, benefiting others. Without bubble-driven illusions of shared prosperity, those who lose out from inequality might demand greater tax contributions from the winners—higher taxes on the highest incomes and taxes on wealth, where the money is. On average, people are richer than they have ever been. It’s just that a tax system that focuses on income from work and treats insanely wealthy people the same as (or better than) ordinary high earners misses where most of national wealth has been accumulating, giving the impression that “we” are sharing a tight period—when, in fact, the burden is disproportionately on the middle class and professionals, who have missed the biggest gains.
Climate change also presents distributive questions. Climate policy is a choice among futures—future energy economies, future atmospheric chemistry, future versions of seasons and weather. Each of these will be better for some industries, regions and people than for others. Even the catastrophic but likely scenario, where greenhouse-gas emissions keep growing at present rates, will work out especially well for the global elites now buying property in places like Vancouver, which are expected to be climate-resilient. Conversely, emissions controls 20 years ago would have been a boon to poor and low-lying populations from Bangladesh to New Orleans’s Ninth Ward. Now it’s probably too late.


Other big questions for climate policy are even more explicitly distributive. Suppose there were a successful effort to charge for greenhouse-gas emissions—a carbon tax. Where would the payments go? Would emissions rights be doled out free to industry according to historical levels of pollution—basically a subsidy for past polluters? Would they be sources of public revenue? Or might they create something like Alaska’s oil-financed Permanent Fund, a stream of payouts to individual citizens? The latter alternatives would announce, in effect, that the global atmosphere belongs to the people of the world, that it is a global commons and that the right to use it comes from these owners and must benefit them. (James Hansen, the eminent climate scientist, calls this idea “cap and dividend.”)
These kinds of measures would be worth some conflict. By contrast, cynical and superficial polarization is just another form of denial, and in some ways the most effective. It produces infernos of political passion—think of the Obama campaigns of 2008 and 2012—followed at most by trickles of change. All this confirms the suspicion that government is always ineffective, that politics is a show of empty gestures and hollow promises. That kind of cynicism doesn’t make politics less engaging; it just makes it less consequential. Politics becomes a form of middle-class entertainment: a highbrow soap opera, sports for nerds, Hollywood for ugly people. This kind of politics could never produce a constructive engagement with America’s biggest problems. At best, it amuses us while we await the guillotine of austerity. In this guise, the politics of denial denies politics itself.
Calling for a more divisive politics does not mean embracing polarization for its own sake. It also doesn’t mean denying that, in the end, we really are all in this together. But we need versions of patriotism and solidarity based in real—which means conflictual—responses to our big problems. We have some fighting to do.
What might this look like? It could mean a major-party candidate calling for a modest annual wealth tax, as Piketty has urged. It could mean defending spending on public higher education to raise social mobility and ease the debt crunch for middle-income and poorer graduates. It could mean defending infrastructure investment and public services as benefits for everyone, and opposing spending cuts and privatization for reserving goods to those who can buy them.
Even just a change in attitude, a new willingness to talk about distributive conflicts, could have surprising results. Less than three years ago, Occupy Wall Street opened a floodgate, moving inequality from a pariah issue to a major theme of the next election. Americans were ready to acknowledge inequality and argue over it. But they needed, somehow, to give themselves permission. A small, mainly symbolic encampment movement found itself giving that permission. Political shifts can be surprising like that—which is probably why the conventional wisdom that Occupy “failed” got it wrong.
What’s especially tricky now is that some of the conflicts we need to embrace are transnational. Changes in national politics won’t be enough, and they could be undercut at the international level even if they start to succeed. Inequality is driven by global capital flows, which no one country has enough power to bring to heel. Climate change, an equally global problem, outruns national borders and undercuts international cooperation. Meaningful responses may require transnational coalitions of working people, professionals and the climate-vulnerable. That is a very tall order, but working-class internationalism was one of the political signatures of the last Gilded Age, so maybe now is the time to recapture and expand it.
Meanwhile, for patriotism and solidarity that go beyond denial, the fighting starts at home. Let the fireworks begin.