Saturday, February 01, 2014

The Neo-Confederate Economy

The Republican view of the economy is that the rich don't have enough money and the poor have too much. The problem with health care is that the poor have too much access to too much care, waste it, and drive the cost up. The other day, three GOP Senators offered a plan to replace Obamacare which would, for the average working person, cost more and provide less. It's goal was to 'sensitize' health care consumers to how much health services cost

Where do ideas like this come from? Why are they so prevalent now, when even conservative Republicans in the past would not have thought them? Why are they so different from the ideas of conservatism in other industrialized countries?

These are the ideological remnants of slavery, and they have become prevalent because the GOP has become dominated by its Southern branch.

Under the slave system, there was one consumption budget for the entire community. All consumption came out of the slaveowner's wealth and income. The working population's food, housing, clothing all came from the slaveowner. And so, it was zero-sum. The more the enslaved workers and the enslaved workers' family ate, or wore, or otherwise consumed, the less was available to the slaveowners for capital expenditures and their personal consumption. The areas of concentrated slavery stagnated economically because consumption by the working population was so weak. In addition, the slave economy in the US was geared toward the export market, so there was no local market for locally produced goods.

Contrast this with the 'free labor' capitalist system. There, the workers pay for their own consumption out of the income they get from selling their labor. Even under the most exploitative conditions, working families had some cash to spend, and made their own decisions as to where to spend it. A whole network of local businesses prospered when workers had more money to spend. As Walter Reuther of the UAW would remind Henry Ford, the health of the auto industry depended on auto workers being able to afford to buy the cars they made. The reality of the interdependence of the complex economy was clear to all.

The United States is now making a great historical transition to a more social democratic system, catching up to other industrial democracies in terms of public services and social support for the whole population. It is being made possible by the rise of a multi-racial electoral majority, which is just now emerging and meeting fierce resistance.

Reactionaries in the United States see the social democratic "welfare" state through the lens of slavery, rather than through the lens of the free labor system. They think the consumption of poor people and of working people comes out of consumption of the rich, in a zero sum system. Hence the division of 'takers' and 'makers', and trying to calculate the exact proportion of each. (I guess the current answer is 47%.) Times are tight, so the solution is thought to be to cut the rations. Hence, austerity, and punitive cuts to food stamps and unemployment insurance.

Looking at the economy through the lens of the "free labor" system, even the most tightwad of factory owners can see that more money in the hands of the poor will increase demand and stimulate the economy.

There are also hidden assumptions of slavery in the dispute over the religious exemption for contraception coverage in insurance under the ACA. The rightwing thinks that if an employer gives employees an insurance policy which covers contraception, then the employer has been forced to pay for birth control against his conscience. The assumption is that the employee is not an independent agent. Is the employer on the hook morally for everything that workers buy with their pay?

The presumption of slavery lurks in our elite's thoughts  that "we" pay for the consumption of everyone, especially those that don't work. The machinery of taxation all benefits "spending our money". So we are entitled to look through their grocery carts the minute the EBT card comes out. Or to demand a drug test. Those that receive a benefit have lost their independence, their autonomy, their agency. In short, they are slaves, living on the largesse of the plantation owner.

These was not the economic theories of the traditional Republican manufacturing elite of the past. It is neo-confederate thinking.

If social prosperity could be achieved by lowering the living standards of the poor, the streets of Mississippi would be paved with gold.


Clyde Grubbs said...

Shoes in 1800 were handy crafts, often produced in farmers kitchens around the cast iron stove during the long winter month by hand stitching the leather and soles together. The farmer made some cash money during a time when his family was idle relative to the agriculture. Feed Bessie and the chickens and get those shoes out. The master shoemakers made fine quality shoes to fit for the wealthier members of the community but the less affluent brough these farmers shoes in the General Store.

Flash forward, by 1830 there shoe factories and they were making mass produced shoes. Now the gentry were still getting their shoes made just for them, and the market for the mass produced shoes was mostly the plantations, just like the market for mass produced cotton garments was the Indian trade and the plantations. So the free labor system arose with one sure market for cheap mass produced products. The mostly agricultural towns of the North were late adopters to factory made shoes and dungarees.

Tom Schade said...

Clyde,so your analysis is that the northern industrial market grew up to meet the needs of the plantation labor force, although the purchasing decisions were made by plantation management, not the actual consumers.

Tom Schade said...

Clyde, either way, the model remains the same -- the goods consumed by the poor and the workers comes out the expenditures of the wealthy -- so the wealthy become convinced that the workers and the poor live at the wealthy's expense and largesse. The only way to increase wealth then is to reduce the living standards of the workers and their dependents. That's the neo-confederate economic theory that survives today as austerity toward the poor.
The counter theory might be the working class should earn enough in income to take care of not only the worker, but the workers' family, the workers' aged parents, the worker's disabled siblings with enough left over for recreational facilities in the workers' neighborhoods.

Pete M said...

Like the confederacy today's South is highly dependent on the government. National political pundits often refer to Republicans, and especially their Southern wing, as being small government advocates. To me the issue is what kind of government not how much. Slavery wouldn't have existed without government enforcement. Few southern politicians today would give back infrastructure created by the TVA, close military installations in their states, or reduce benefits for elderly (as opposed to the non-elderly poor) such as Medicare/Social Security. This article suggests that the South receives government benefits disproportionately:

Clyde Grubbs said...

No form of property would exist with out government protecting that form of property by law, police, courts.

Clyde Grubbs said...

Tom, I agree the argument is the same, just saying the Lords of the Loom, and the Lords of the Lash were interdependent. New Yorks banking and merchants were highly invested in financing the plantations and were the money behind the Cooperheads.

Elz Curtiss said...

Well done, Tom. This is why I just plunked out thirty closely-held bucks for Ebony and Ivy, about how slavery shaped US academic and intellectual institutions. Chilling, and dead on with what I already had been taught.