What Will a Slow Growth Future Mean for Progressive Politics?

A growing number of experts are arguing that the era of fast economic growth is over, at least for wealthy countries like the United States. If that's true, what does it mean for progressive politics?

I'll get to that question in a minute. But first consider the recent obituary for prosperity that Stephen King published in the New York Times, excerpting his new book, When the Money Runs Out: The End of Western Affluence.

King's argument is simple. Western nations are now facing stagnation because "a half-century of remarkable one-off developments in the industrialized world will not be repeated." 

King points to five big and unique shifts that spurred unprecdented prosperity during the 20th century: a) the opening of global trade, b) financial innovations like consumer credit, c) new social safety net protections which enabled people to spend rather than save, d) reduced discrimination against women and other groups that brought new human capital into play, and d) huge advances in education. 

That list, of course, reads very much like a greatest hits of modern liberalism—a movement which pressed for an open world economic system, programs like Social Security, civil rights, and greater access to education, particularly college. Why liberalism doesn't get more credit for contemporary American prosperity is puzzling. Perhaps it's because the left tends to talk more about equity than prosperity.

Anyway, back to the main question here: Let's say that King is right, and that the big trend that boosted postwar prosperity really have run their course. What will that mean for progressive politics?

Unfortunately, plenty of bad scenarios leap to mind. The slowing of growth in the 1970s proved to be a boon to the political right, which deftly blamed big government and redistribution for stagnation. More recently, the financial crisis and subsequent recession helped fuel the rise of the Tea Party.

Broadly speaking, the core progressive value of equity is an easier sell when there is plenty of wealth to go around. If you have plenty, why not share some with folks down the economic ladder? In contrast, tough times trigger a scarcity mentality: I better horde everything I have because there isn't enough to go around. Conservatives play naturally to the scarcity mindset with their focus on individual responsibility (e.g., if somebody is having a hard time it's probably their own damn fault) and the sanctity of private property (I shouldn't have to share a dime of my hard-earned wealth with anyone else). 

More concretely, slow growth poses a deep threat to social insurance programs. Back in 1960, there were 5.1 American workers for each Social Security beneficiary. Today, there are about 3 workers, and that number will head down as the Boomers retire—to 2.1 workers per retiree by 2040. 

Since 1960, fast rising productivity and wealth creation has offset the decline in the ratio of workers to retirees. But what if those prosperity gains are a thing of the past, even as aging accelerates? Watch out.

Already progressives face decades on the defensive as entitlement programs come under strain because of retiring Boomers and a squeeze on all government spending caused by paying for old people (both nationally and locally, with exploding public pension costs). If growth really does stall, that battle is going to be far more vicious. 

Now for a more rosy slow growth scenario. 

One can argue that rising wealth actually runs counter to core progressive ideals like community and equity because those ideals tend to get pushed aside amid the chase for affluence. When there's lots of money to be made, people focus on making money. Think of the late 1990s or the housing boom of the Bush years. Everyone gets anxious about getting their share of an expanding pie -- and keeping up with the Jones as personal spending goes up. 

But when there isn't a lot of money to be made, capitalism and consumerism are less front and center in society. People can focus on family or community or whatnot without feeling that they should be out making hay while the sun shines. 

Oh, and no small thing: Consuming less is actually a prerequisite for planetary survival going forward, so a slow growth future supports the progressive imperative of sustainability, too. 

Which future scenarios are more convincing? That's hard to say, particularly since it's easy to imagine a combination of good and bad: Say, for instance, a serious fraying of the social safety net even as Americans rachet down consumerism and economic competition to focus on strengthening human bonds. 

But one thing is for sure: Even as progressives need big plans for jumpstarting growth, we also need to think about what politics will look like if strong growth never returns.

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