TED Talk: What does it mean to be a Progressive in the 21st Century?

 

The Issue, I want to speak about today, is, what it means to be a Progressive in the 21st Century. And this is a more tricky question than one would assume at first sight. Let me try to give you some hints, what I mean with that.

There are a lot of people who think that our western societies, our western capitalist societies or the western market economies – it’s not so important at this point how we want to put it – are on a wrong track. 

Actually, since the downward spiral and the economic uncertainties, which we can observe since the slump in the financial crisis in Fall 2008, most people think, that there are a lot of things wrong with our societies. Frankly, how could they think something different. 

Not so few people would go further and say, that with capitalism itself is something wrong. That Capitalismus doesn’t have only problems, that the Capitalism itself is the Problem. 

And if they are not in a strong sense „Anti“, they are it maybe in a softer sense, that this System is prinipielly unfair, or some others maybe would lament, that the Consumer-Society makes everything to a commodity, that everything is about money, that this undermines our social relationships, all social spheres of society, that this makes the TV-Programms worse, and: McDonalds! and so on. You all know this modes of critique and, I a am sure, three or four other modes of critique too.

But this is really paradox. Capitalism has won. This system, it is said, is the Winner of History. 

And this is for sure true in the sense, that even most of the people, who have a bad sentiment about this system, they don’t have an alternative system in their pockets. 

They think that capitalism isn’t nice. That it is unfair. That it destroys our cities and our environment and our social neighborhoods. But they don’t see, how to change that. 

You don’t need too much irony to say, that this kind of critique postulats: Capitalism is principially bad. But there can’t be done anything about it. 

And let me now come to Progressism.

Progressism, which was in history mostly associated with people and movements or parties on the left, shared some or most elements of this critique. It shared the critique, that capitalism is unfair and unjust, that it’s a system of exploitation, that it gives to the privileged, and that it should be succeeded by a better system. 

Or, that the special, actual configuration of market society was unfair and unjust, and that it should be succeded by a more just, more equal, and more stable kind of market society by curing the ills of the system. 

First was the programm of the more radical, second that of the more reformist strain, for example postwar social democats in Europe or the New Dealers in the US. Both strains had in common, that they were confinced, that it is possible to change a bad system to a better system or to change a not good enough system to a better system. 

Anyway. What they had in common, was, to put it simple, that this is possible, that citizens, men and women, have it in their hand, to make a change for the better, to improve their societies. 

That Progress in History is possible. That’s what gave them their name: Progressives. 

And this was not only a political programm. It was a Mentality. Optimism. They weren’t depressed by the ills of their societies, these ills inspired them and urged them to cure them. 

Martin Luther King in Front of the Lincoln Memorial didn’t say: I have a Nightmare. He said: I have a dream. 

To be a Progressive in the 21st Century means, first, to restore this optimism, and the élan, which results of optimism. Second, and this is important to me, that it is possible in the framework of a capitalist market society to make it more just and fair and more equal, and, more than that, that this is a condition to make a market capitalist society more stable and functiable. 

A society that shares its prosperity with all its citizens also functions better economically. The economic competence of progressives consists in their understanding this. 

It is important and really decisive to understand that, because neoliberal economists have brought into the world the thesis that says that the more freedom one concedes to the markets, the more wealth will be created. 

With puffed-up chests and more than a dash of arrogance, neoconservative and free-market politicians influenced by a certain kind of economists have insisted on their „economic competence“ and brushed off all those who dared point out that unregulated markets not only produce social injustice but also massive instability. 

The basically Philosphy of this is: If everyone just follows his aggressive egoist self-interest, this would contribute to the general public benefit, creating more wealth and prosperity. 

From this prosperity, albeit with an uneven distribution, even the underprivileged would benefit thanks to the famous trickle-down effect. 

The Postulation goes on that way: if the winners would be reversed with great benefits by the markets, the losers would also be reversed, and all intentions, to secure more even distributions be extra-market-means would shrink prosperity and growth and harm us all, also the lesser privileged. 

But this is not only wrong. It is, actually, the other way round. 

Chronic injustice is harmful, and also economically harmfull, essentially for four reasons. 

First: prosperity for everyone bolsters purchasing power and domestic demand, stimulates the economy, and nothing had changed with that in an open, globalized world. 

Second: if all people live in materially secure conditions, then all people are also able to develop their talents and contribute to overall prosperity. Leaving people on the fringes of society, so that their opportunities waste away, isn’t only unjust, it’s also inefficient. 

Third: if citizens get the feeling that things aren’t fair, they will engage less. 

Fourth: being underprivileged is hereditary. Whoever is born in poverty gets a worse start in life. Children who fall behind in their first years of living are born losers. This isn’t only unjust, it also wastes the potential of people who could contribute something to wealth and prosperity. 

Those who want to gain advantage at the cost of others might be successful in the short term, but in the long run they make us all poorer. Microeconomic thinking is beneficial only from the perspective of the individual business; if a whole national economy adopts this logic, it leads to a dead end and a downwards spiral that leaves many people worse off. 

Let me illustrate this. 

For a small factory owner, reducing employees‘ salaries and producing as cheaply as possible may bring a competitive advantage. But if all factory owners did this, none of them would be happy: they all need consumers who can buy their goods. If people don’t have any money, companies don’t have any customers. 

Not only that: because every manager has to keep production costs in mind, proper wages are also an incentive for rationalization, for inventing better machines and so on. Higher wages constitute an implicit incentive for technological progress; low wages, in contrast, are often responsible for a national economy falling behind. 

If wage dumping is permitted, productive companies with good economic management and innovative business models are „punished“. They have to compete with companies that are less economically efficient and that possibly offer worse products.

In Germany – and to a lesser extent in Austria – a dangerous strategy has been pursued in recent decades. Under the influence of economically liberal doctrinaires, the upwards trend in real wages has been reversed and a low-wage sector has been established. 

Germany’s „competitive position“ has „improv
ed“ in the past years by 14 per cent; Austria’s by 6 per cent. 

„Improved“ of course sounds like a good thing, but means nothing else than that unit labour costs in both countries have dramatically decreased in comparison to their economic partners – precisely because wages have fallen, or risen more slowly, in relation to increases in productivity. 

At the same time, income inequality has skyrocketed. In 1987, a board member on average earned 23 times more than an employee; in 2007 it was over 109 times more. 

The size of the underclass has also risen sharply, increasing from 19.2 per cent to 24.2 per cent of the population. 

In all advanced capitalist countries the share of the top one percent of income-earnes had risen sharply in the last 20 Years, from an average of 8 Precent to 15 percent. But also to higher levels, like 18, 19 percent in the US. The Top 1 Percent concentrates already nearly 20 percent. But this isn’t necessarily the case. In better times, in the 70ies, this share was six, seven percent in most countries, and in the best, which means most equal societies, like Sweden, it was only four Percent. 

Societies were much more equal, and the economy was much more stable, Prosperity was much more sustainable. 

The fact is that fairer distribution of wealth leads not only to more demand, but to greater economic activity. Stable prosperity results in more people having jobs and more people having good jobs. 

As a rule, this doesn’t only mean that people receive their pay on the first of the month. People are no Cash Machines. This means more to them: They also learn something and are able do something; they develop abilities and generally go through life more optimistically. 

In other words: economic fairness triggers a series of win-win effects, while economic unfairness brings with it a series of lose-lose effects. 

An economy is dynamic, not static. If one allows for more just distribution – and does what hasn’t been done for a long time, namely distribute from the top to the bottom – the ALREADY generated wealth will be distributed differently. But – and this is a big „but“ – if a national economy becomes more productive as a result, it will also become richer as a whole, meaning that generated wealth will grow. 

In short: a dynamic society is not a zero-sum game. 

Not only are egalitarian societies more liveable societies, they are also more productive. The slogan „prosperity for all“ is a guideline for a fairer distribution of wealth as well as for the production of greater prosperity. 

Unjust societies are often more unproductive: they subsidize unproductive sectors through cheap production and they forego important domestic demand by failing to let the large share of the population participate in the prosperity. Instabilities in financial markets, which, as in the recent crisis, can lead to (near) collapse, have a lot to do with inequality. The circle is complete. 

Let me come to my final points. 

If you present these arguments, most of the Neoliberal-Mainstreamers would say: No, Capitalism is unfair, but it’s the most dynamic System we can imagine. They say: It is principially unfair, and this is good so. 

Some diehard leftists would say something similar: That all the ills of our contemporary western societies show that capitalism is „principally evil“. 

They say, like the neoliberals, It is principially unfair. But they say: This isn’t good so. 

But they both are not right. Things aren’t that simple. It is possible to make the market economy more just – and in doing so, make it function more efficiently. This is the gratifying lesson to be learned from what a group of German economists has called „good capitalism“, in contrast to earlier and later predatory forms.[8]

Such a capitalism cannot, however, be one in which „the markets“ are simply left to their own devices. The financial markets in particular require a tight regulatory framework. A „good capitalism“ is not one in which the „law of the jungle“ determines income distribution, and where governments increasingly become „night watchmen“ that save bankers when they run the system into a brick wall but otherwise keep out of long-term investment decisions. Societies need to set ambitious goals in order to manage their economies more fairly and more sustainably.

The „Good Capitalism“, which gives all the citizens a fair share, with good wages and social security, which reduces Inequalities and introduces a more equal distribution and combines this with growth of wealth and more possibilities, with economic dynamics, yes, and also with more freedom, with the freedom to make something about your talents, to live al good life, this „Good Capitalism“ isn’t something, which could only exist in a special short periode, in the 50ies and 60ies and the beginning auf the 70ies. The basically rules didn’t change. 

But most of the heirs of the progressive Movements and Parties thought in the recent years and decades, that the have to choose between two bad alternatives: The first is the option of the diehard left, to say, things go bad and worse, the good times have gone. No way out. Bad mood. Nostalgia. 

In a way, some more traditional social democratic parties say: „Vote for us, because with us things will go worse more slowly“. 

And the second option was that of the Modernists, which meant, adopting the phrases of Neoliberalism, showing: We are also Business-Friendly. Which meant: We have forgotten, what we already did know about how an Economy works. 

Sometimes, these both Strategies are even combined.

Both are no good Strategies, and they don’t get better, if you combine two bad Strategies. Both lead to nowhere. 

To be a Progressive in the 21st Century means to avoid this bad Strategies. 

A more just society that achieves more equality and enables its citizens to participate in prosperity is also a society that functions more effectively at the economic level. The economic competence of progressives lies in the fact that they understand this. To say it in the words of Joseph Stiglitz, „the most important production factor of a country is its people, and if a high percentage of people does not realize its potential […] the country as a whole cannot realize its potential“.[11]

This is a decisive point that the forces of the Left have failed to make sufficiently clear in past decades. Much will depend on changing this in the future.