In a recent piece in Jacobin, Matt Bruenig hails the new stimulus bill as a “watershed moment” in the fight against poverty in the United States. This dramatic “ideological reversal,” “a revolution in welfare state thinking,” as he describes it, has shattered a “25-year bipartisan consensus” against direct cash payments to the poor. “The fact that we had this debate and the pro-welfare side won is something to be happy about.”
Certainly there are provisions in the bill that benefit poor and working class people. But is this a major turning point in an ideological battle over the legitimacy of welfare state policies? Hardly.
It would be nice if our system of government was a forum for debating the merits of various ideological proposals to advance the common good. But this is simply not how the state under capitalism functions.
Other things being equal, the state tends to promote the interests of the capitalist class at the expense of the working class majority.
It does this for at least two reasons. First, the capitalist class spends enormous amounts of money influencing politicians—and this is why the two parties that dominate U.S. politics prioritize the interests of their corporate donors, not the majority of voters.
Indeed, the 2020 election was the most expensive election in history, with more than $14 billion spent up and down the ballot, most of it paid for by super-PACs and extremely wealthy individuals. As Kim Moody noted in January, “the nation’s rich paid for the 2020 election, and they will be its major beneficiaries.”
Secondly, we’ve got to keep in mind that the state under capitalism depends upon tax revenue generated by capitalist economic activity—and this, in turn, puts governments under enormous pressure to promote a profitable investment climate for the ruling class. Because when profitability dips too low, capitalists lay people off, stop investing, tax revenues drop and a crisis ensues.
This is a powerful barrier against reform absent sufficient pressure from below.
These two reasons, then, are why capitalist states tend to consistently prioritize the interests of capital above those of workers. This explains, among other things, why huge banks were given enormous bailouts in 2008 whereas working class homeowners were left high and dry.
Seen in this light, then, we have to ask: why has the government, which as we know is awash in corporate cash, recently decided to spend money on cash transfers and tax credits for the poor? And why has the ruling class itself been so vocal in supporting these measures?
Context is important. As Bruenig himself points out, the most recent stimulus bill is not the first, but the third time in the last year that the government has sent out direct cash transfers, the first two coming when Donald Trump was still in the White House and Mitch McConnell was still Senate Majority Leader.
So, rather than representing a dramatic shift, the newest stimulus bill builds on what the previous ones already did. And far from having poverty reduction as their goal, these measures seemed quite obviously aimed at propping up demand and keeping the corporate profits afloat amidst the disruptions caused by the pandemic.
Let’s not forget that each infusion of stimulus had the effect of boosting the stock market—and, last I checked, these markets respond not to ideology as such but to expectations of profit. Indeed, at moments when deliberations over stimulus bills began to stall, markets often took a sudden plunge downward.
There is indeed a shift going on, but it’s not an ideological shift in politician’s attitudes toward poverty—instead, what we’re seeing is better described as a shift in ruling class attitudes toward government spending and deficits as a way of stabilizing corporate profitability.
This shift was well underway before Biden took office. As Robert Brenner pointed out months before Trump left office, “some $4.586 trillion, roughly 75 per cent of the total $6.286 trillion derived directly and indirectly from CARES Act money, [went to] the ‘care’ of the country’s biggest and best-off companies.”
That’s “revolutionary” in a certain sense, but not in the sense that we (socialists) like.
Still, the question remains: what explains the shift? The background is crucial: long-term stagnation and historically low rates of profit, combined with the sudden shock of the pandemic, caused the U.S. economy to shrink by 4-5% in 2020—the largest contraction since the 1930s. In these circumstances, the ruling class has come to prefer government deficit spending to the thin gruel of austerity, but not because they’ve experienced a sudden conversion to the cause of welfare and poverty reduction. On the contrary, massive infusions of cash from the government—whether in the form of fiscal or monetary policy—appear to be all that’s propping up their economic position.
Of course, these inconvenient facts haven’t stopped the political boosters of the Biden Administration from engaging in a full-court press to tout the progressive credentials of the stimulus bill. Why they should be so eager to paint it as a historic move to eliminate poverty is obvious: the Democrats, in control of the White House and both chambers of Congress, have reneged on a slew of promises they made to voters in November. For example, they declined to raise the minimum wage to $15 an hour, they have more or less maintained most of Trump’s draconian anti-immigrant measures—we could continue.
Meanwhile, economic inequality continues to soar as billionaires get richer; rates of unionization continue to stagnate or fall; unemployment and underemployment remain persistently damaging to millions of workers; and come September when the temporary measures from the stimulus will have run their course, bills, rent, mortgages and debts will still be there.
The only way to turn things around is to increase the organization and disruptive power of the working class. Hoping shifts in elite opinion about fiscal policy will morph into a new era of social democratic renewal is not going to cut it.
Now, someone might reply that insurgent left politicians—like Bernie Sanders and “the Squad”—are the reason this shift in elite opinion is occurring. The idea would be this: Because Sanders ran a campaign that popularized certain pro-worker policies, politicians have been forced to make concessions to our side and reluctantly pass bills sending cash transfers to the poor.
This strikes me as thoroughly unconvincing. Sanders relentlessly campaigned on a $15 minimum wage and even helped force Biden to give rhetorical support for the measure as a way of securing votes in the November election. But the $15 federal minimum wage is currently dead in the water, despite Sanders’s dogged support for it and despite the fact that the measure is enormously popular with voters. Denying a raise to tens of millions of underpaid workers isn’t exactly what you expect from a government that has been allegedly won over to the imperative of poverty reduction.
The moral of the story, then, is that we should probably hold off on celebrating the stimulus bill as a major ideological shift to the left or as a substantial victory for our side. After all, capitalist economic expansion often results in some benefits for workers in the way of decreasing unemployment and rising wages—but we don’t celebrate cyclical upswings as victories for the left.
Victories for the left occur when workers and the oppressed organize themselves, confront the powers that be and force them to grant us concessions. Genuine victories don’t simply make the lives of ordinary people better: they also teach them that, collectively, they have the power to push back against the ruling class and win.
Though I’m happy that there are self-avowed socialists in Congress making arguments in favor of reform, this layer is currently small and lacks the power to veto policy or force through measures that the corporate-friendly majority opposes. And, outside the halls of government, the organization and combativity of social movements is not presently at a high enough level to wrest concessions from the ruling class. This means that we aren’t in a position to exert a strong influence on policy-making at the moment.
To change that, we need more power. So in its relative absence, it doesn’t do the left any favors to pretend that we’re winning. And it certainly isn’t good to pretend, when it plainly isn’t true, that the Biden Administration and the Democratic establishment are our allies.
What, then, is the alternative?
There aren’t any shortcuts that I can see. But we’ve got to continue to recruit people to join socialist organizations. We’ve got to keep building on the explosion of activism against white supremacy from last summer. We need to find a way to renew the labor movement and spark a drive to organize the unorganized. And we’ve got to elect more self-avowed socialists to government.
But none of these goals are well served by pretending that the current administration is sympathetic to our cause. The way forward has to include a sober assessment of the obstacles we face.
Correction: An earlier version of this article mistakenly stated that Amazon’s owners opposed the minimum wage hike bill. The article has been updated to correct this.