Alan Freeman asks why the US fears being progressive when its economic power was built by progressive policies.
Imagine this: a new US political party stands for election committed to “dissolving the unholy alliance between corrupt business and corrupt politics,” universal social insurance, major restrictions on campaign finance contributions, trade union rights, women’s and black rights, big cuts on import tariffs, anti-business legislation, and the protection of water resources from private corporations.
Liberal woke nightmare? Under the leadership of former President Theodore Roosevelt, the US Progressive Party secured 27% of the popular vote in 1912 on this platform, placing the official Republicans in a distant third. This was the highest percentage ever achieved by a third party in US history and the only time a third party finished second.
Moreover, Progressivism as a trend in US politics neither started nor stopped when Teddy Roosevelt, who had already won two terms as a Republican President, split his own party because it wasn’t going far enough. Progressivism remained a Republican theme until the neoliberal turn of the 1970s, when it was adopted wholesale by the Democrats in the 1930s under Teddy’s Nephew Franklin Delano.
Imagine a US government that placed all American industry under public control and raised state investment to 90%. Too audacious to hope for? Yet, this is precisely what the Democrats under FDR accomplished between 1942 and 1945, resulting in the most significant expansion of the US economy in history.
Was progressivism an economic failure? This would be hard to argue: Whatever the Roosevelts did wrong, the industrial foundation of US ‘Greatness’ was laid under their administrations.
Was progressivism an economic failure? This would be hard to argue: Whatever the Roosevelts did wrong, the industrial foundation of US ‘Greatness’ was laid under their administrations. Two charts illustrate this point. Chart 1, from historic GNP data provided by the Bureau of the Census, shows the gap between actual growth and the trend rate from 1890 to 1970. Chart 2, from BEA GDP data, shows the percentage of government spending in GDP and compares it with the rate of GDP growth, averaged over four years.
To cite Churchill, we confront an enigma wrapped in a mystery. Economic growth is overwhelmingly associated with progressivism. Why, then, are the political classes in the US so unyieldingly hostile to doing the obvious right thing for their country today? And why does mainstream economic theory so stridently insist, against the evidence of such basic facts, that progressive social policies are nothing but a burden and that the state is the enemy of growth? The solution to this riddle lies in the fact that these policies were financed, essentially, by war and economic conquest.
Republican foreign policy was ruthlessly expansionist. Teddy Roosevelt annexed Puerto Rico, occupied Cuba, constructed the Panama Canal, and initiated the so-called ‘Banana Wars,’ constantly supporting US growers such as the United Fruit Company and transforming the small states of Central America into plantation economies. Together with War Secretary William Taft, he pioneered neocolonialism by blending nominal political independence with economic servitude. They pressured puppet governments to provide privileged access to products of cheap labour, while neglecting economic development.
The exhaustion of this economic model underlies the USA’s crisis of political leadership. Once, the world was indebted to the USA; now, the USA finds itself in debt to the world.
The second facet of the USA’s rise to global dominance was its finely-tuned war machine, enabling it to become not only the workshop of the world but also, crucially, its financier. Under Teddy’s nephew Franklin Delano Roosevelt, from 1942 to 1945, the USA produced $183 billion worth of weapons and supplies, which is equivalent to $2.21 trillion in 2021, accounting for about 40 percent of global munitions output. One quarter of US production consisted of warplanes, while another quarter comprised warships.
The exhaustion of this economic model underlies the USA’s crisis of political leadership. Once, the world was indebted to the USA; now, the USA finds itself in debt to the world. The cause is as obvious as it is overlooked: the USA is no longer the world’s workshop. Over the US political landscape hangs its greatest economic fear: rivals that can sell its citizens advanced products at lower prices than its own manufacturers.
Yet this fear is as unfounded as the almost hysterical refusal to confront the USA’s progressive past. Economically speaking, it is absurd—on the grounds not of vague idealism, but of sound capitalist management—to turn away from the prospect of paying less to receive more. There is no doubt that ordinary American people would be better off if they purchased their phones from China, their kitchen gadgets from Turkey, their cars from almost anywhere but their own suppliers, and, for that matter, their fuel from Russia. Who, twenty years from now, would regret transforming the US transport and energy systems with the latest Chinese technology, thereby breaking the oil habit once and for all, addressing countless social problems with a massive social housing programme, reducing the burden of the world’s most expensive health system by enacting truly universal care, or bringing the nation’s Higher Education system firmly into the Twenty-First century by abolishing student debt along with the exploitative loan system?
To achieve this, however, a fundamental break with the dark side of US policymaking is required: domestic and foreign policy must be reimagined together, not separately. Continuing to hinder the development of the rest of the world, as successive US administrations have done since 1898, is economically utterly irrational because the greater the productivity of America’s suppliers, the less it has to pay them. The logical, rational course for the United States is to finance a progressive domestic agenda by enhancing, not undermining, the development of those it engages with.
This urges policymakers to confront the most radical aspect of progressivism, which is also the most quickly suppressed policy: the separation of business and politics. Financial interests ensnare the US political system, which even celebrates this connection, as demonstrated by Trump’s Cabinet. This distorts the essential relationship between the state and business needed for the profound restructuring that the US economy must undergo for the nation’s survival. The real hindrance to addressing the genuine needs of the US Nation does not arise from a conspiratorial ‘Deep State’ but from the monopolies that dominate it: its financiers, Big Pharma, the Military-Industrial Complex, and those reliant on oil—essentially, those whom US radicals once condemned as ‘Plutocrats.’ In short, these entities fail to look beyond the short-term, harsh, and self-serving gains of pitting Nation against Nation towards a world of those truly Great governments that share their people’s future with those of all others.
