Amy Chua wrote World on Fire two decades ago, arguing that globalism and democracy would collide by bringing out ethnic and religious resentments around the globe. She identified animosities country by country that would explode when times got tough.
Many of us connected economic and democratic health. In hard times people look for scapegoats and blame each other. I’ve gotten jobs from and lost them to people of other races and genders. That’s normal and goes both ways but I did fine and don’t need to blame anyone. Many who don’t feel as well are looking for reasons.
Chua’s analysis isn’t destiny. Unions in Hawaii realized workers would do better if they were united. Hawaii developed a lovely multi-cultural society as a result. But Yugoslavia came apart in rough times. I fear the European Union and the United States can come apart if we engage in an orgy of blame.
Franklin Roosevelt focused on creating jobs in the 1930s and World War II finally pulled us out of the Great Depression. John Maynard Keynes explained that, when an economy is in the doldrums, spending and investment, by government, industry or consumers, pulls the economy out most effectively. Democrats have worked with his ideas ever since and the overall, national, economy has done well with Democrats in power, particularly when Democrats had a strong labor union base focused on workers.
But capitalism is built on creative destruction. Miners’ desires notwithstanding, other industries have been replacing coal for most of the twentieth century because coal dust and soot blanketed cities, killed plants and got into people’s lungs. The process accelerated recently as more sources of heat and power became available. It’s a benefit that capitalism allows shifts like that but also a problem that capitalism makes workers pay the greatest price for such change. Macroeconomic, Keynesian thinking helps but it doesn’t solve the harms to specific groups of workers who’ve lost out through no fault of their own. More is needed.
Republicans view the economy differently, particularly since Ronald Reagan became President, focusing on supply side economics which stresses putting more resources in the hands of companies, entrepreneurs or so-called job creators. Unfortunately, supply side economics leads Republicans to ignore what business does with money, hoping that enough will be used to create jobs at home. But business also uses their money to outsource to foreign countries, buy stock back, build monopolies and the like, which don’t help American workers. Business helps American workers when they find demand for what American workers produce. That’s not automatic.
So supply side economics leads Republicans away from strategies that would actually help workers and aggravates hard economic times that tend to push workers to fight among themselves for the available jobs. Under most conditions, supply-side economics is a smokescreen for policies that make things worse. Staying away from anything related to supply-side economics is much better for workers, brotherhood and labor unity. But the alternative Keynesian economics isn’t enough. There is a gap with respect to finding work for areas which have lost their main industries.
To save our democracy, it’s crucial to get across what actually will help American workers and what won’t. That’s why the argument over government projects, like rebuilding infrastructure, is so important.