Everything for Sale, Part II

THE OPEN MIND
Guest: Robert Kuttner
Title: “Everything for Sale” Part II
VTR: 3/4/97

I’m Richard Heffner, your host on The Open Mind. And this is the second of two programs with Robert Kuttner, founding co-editor of the new, liberal publication, “The American Prospect”, whose compelling Twentieth Century Fund study of the virtues and limits of markets has been published by Knopf under the title “Everything for Sale”.

Well, the marketplace and deregulation don’t automatically appeal to Mr. Kuttner as they do to conservatives and neoliberals. And he concludes his book, “Everything for Sale”, with the thought that “A society that was a grand auction block would not be a political democracy worth having.” And I think we ought to pursue that thought still further, perhaps by my starting off asking you, Mr. Kuttner, a question that occurred to me in our first program, that occurred to me when I read “Everything for Sale”, that occurs to me as I read “The American Prospect”: What are the attitudes toward, or the conclusions about, the nature of man that inform your particular brand of political, liberal thinking?

KUTTNER: Well, I think, contrary to the economic model of man, which assumes an individual that is rational and calculating and hedonistic, my model of man assumes that man is also a social creature, that man (and you can go back to the Ancient Greeks for this model of man), man is a political being; not just a being of getting and spending. And if you turn man or woman into merely an economic creature, you impoverish social man, you impoverish political man. So that the multifaceted nature of human beings is reflected in the need for a multifaceted society which is a polity, which is civic life, which is social life, cultural life; not just market life.

HEFFNER: It’s interesting you say, “It’s not just market life,” or “Not just getting and spending.” But getting and spending seem, in our times, whatever the shifts that are taking place, getting and spending would seem to be what it is we do in our country, at least. If the mythical man from Mars were to come down and go back and report, what would he report? “These people get and spend.” So how do we fit that in with your sense of what the nature of man is?

KUTTNER: Well, I think the pendulum swings back and forth. There are cycles of history in which we go through moods where we are more public-minded; we go through moods when we are more private-minded. And this is a time when the ascendant public philosophy, if you will, is that of social Darwinism, is that of man as a selfish creature, and that this is said to be a good thing, that the more we behave like the model of economic man in the economics textbook, the happier we’ll be. I think that view is playing itself out, because it’s not leading to an increase in security and well being and happiness. And I think most of us as citizens would recognize that we like a society where there is a big place for the entrepreneur. We like a society in which there are many restaurants from which to choose, in which the food in the markets is fresh, in which there are different stores to shop in. But we also expect a society in which our children’s schoolteacher is not first and foremost an entrepreneur, but a teacher, who gets paid adequately, decently, fairly, but who doesn’t get his or her satisfaction from thinking like an entrepreneur: “What can I make that I can go out and sell?” And I think there are other professions, other occupations: schoolteacher, doctor, nurse, journalist, librarian, public servant. We don’t want the fellow who is the statistician in the Bureau of Labor Statistics to be thinking, “How can I go out and sell this database on the side?” We want that person to be respected professionally for doing a good job, and to believe that having a career in public service is something virtuous in itself. So this is a quest for balance. And I think the pendulum lately has swung too far in the direction of thinking that everybody is really an entrepreneur and everybody only has financial motivations, commercial motivations, at heart.

HEFFNER: Don’t you find — leading question — don’t you find that increasingly people will say, “Well, it costs too much,” and will say it about health care, will say it about education, will say it not just when taxes are about to be voted up or down, but when the opportunity comes up to avoid the whole question of taxes for schools by selling space for advertising? Isn’t that what is happening more? Whatever is happening on the level of your colleagues, of intellectuals at your level, that we seem to be saying, “Well, it costs too much, so we better sell our souls.” We may not say, “Sell our souls,” but “Sell our space on the school wall for advertising.” That’s why I see a split. I see you and your colleagues, thank goodness, doing your thing, but I see that as at such a remove from what most ordinary Americans are doing.

KUTTNER: Well, I think most ordinary Americans are very schizophrenic on this subject. I mean, this is a country where people can say in the same breath, “Get the government off my back,” and, “There ought to be a law.” Simultaneously they can think the government looms too large in our collective lives, and that there is some private abuse that ought to be against the law. This is a very litigious society. This is a society that looks to government for redress. And you mentioned health-care. We spend more on health-care than any other country, relative to the size of our total economy. And so much of the waste and inefficiency and injustice in health-care is the result of the fact that it is too privatized; that too much of the health-care industry has become an industry rather than a service, where you take the premium dollar, and the shareholder gets his 15 or 20 cents, and the consultant gets his nickel, and the salesman gets his nickel, and pretty soon you’re down to 60 or 70 cents on the dollar to pay for actual health-care, and the whole health-industrial complex is trying to pass that risk backwards to the doctor. So this is a system which doesn’t work very well when it’s turned over to the forces of commercialism. And the thought that it’s too expensive should not lead to the remedy of greater privatization, because it is precisely greater privatization that has made health-care in America so inefficient.

HEFFNER: Should we ask the first person who will to stand up and say, “I will no longer take my part out of this. I will no longer take my nickel, my dime.”

KUTTNER: Well, I think if you could have universal health coverage, you would eliminate so many of these middlemen that you could cover everyone who’s uninsured and have more money available for the actual delivery of care and not get these commercial forces stepping in between the doctor and the patient as a way of diverting more and more money for shareholders.

HEFFNER: Well, it leads me then to ask you a question that I asked Milton Friedman many years ago at this table, Alan Greenspan, and many, many others: Do you feel that ours is a rich enough land to be able to afford, let’s call it social justice for all of our citizens?

KUTTNER: Oh, certainly. I mean, it is a rich enough land that we ought to be able to pay for basics like education and health-care collectively. So that the ability to get a decent education for one’s children, the ability to get health-care when one is sick, should not be a function of one’s private purse. And one can do that and still leave an enormous realm for private getting and spending, private enrichment. I think it’s also a society where we can have the economy be very dynamic and be very efficient without having the extremes of wealth and poverty that we currently have. You do not need Bill Gates to make his fifth million, billion, his tenth billion, and his twentieth billion in order to have the high-tech economy run efficiently. So one of the things that’s happened in the past 30 years is that, one by one by one, almost all of the instruments that temper the extremes that a market society creates have been dismantled. And so we’re getting a society more of extremes.

HEFFNER: Well, it seems to me that you did not mention… You mentioned health-care. You mentioned education. You did not mention welfare. Now, when I ask you the question of whether we have enough in this country, whether we’re wealthy enough in terms of our basic resources, whatever the organization of the production of wealth, to care for the burgeoning population, care for coming up now to 300 million people (and I used to, not so long ago, be able to say “200 million,” and then could say “approaching a quarter of a billion,” and now considerably over that), when you say, “Yes, we do,” you talk about health-care and you talk about education; would you talk about welfare too?

KUTTNER: Well, welfare in the sense of AFDC (Aid to Families with Dependent Children), I think almost everyone, including myself, would agree was a program with perverse incentives. But that doesn’t mean that you cut the poor loose. And the state of the debate five years ago on welfare reform when Clinton was running for president the first time, had liberals, some of the best of whom went to work for Clinton, all three of whom in the subcabinet level resigned in protest last fall against Clinton signing the Welfare Reform Bill, but at that stage of the debate the liberal position was, “Yes, let’s get rid of AFDC. Let’s put a time limit on the entitlement to collect a dole for not working. But let’s have jobs, let’s have job training, let’s have childcare, let’s have health-care, let’s have an earned-income tax credit, minimum wage,” with the presumption — and Clinton said this in almost as many words — if you work for a living you shall not be poor. Now, that requires some subsidy. The money that we as a society spend subsidizing the poor is maybe one percent of GDP. It’s not a huge amount of money. I mean, if you add together food stamps that go to the poor, Medicaid, and what’s left of AFDC, you’re talking about something under $100 billion in an economy, you know, that’s almost a hundred times that, seven or eight trillion dollars of GDP. So certainly we can afford to bring up the bottom ten or the bottom 20 percent of the income distribution. The question is: What’s the best way to do that?

Now, when Clinton signed the Welfare Reform Bill and took $40 or $50 billion of income transfers away from the poor, it would have been much more sensible for him to say to the Republicans, “If you want me to sign a bill getting rid of $40 or $50 billion dollars of existing benefits, my condition for signing that bill is that we reprogram that $40 or $50 billion into job creation, job training, daycare, wage subsidy, so that we make it cost effective for poor people to better themselves by working.” And he didn’t have the nerve to do that.

HEFFNER: But of course that wasn’t the motivation of those who passed the bill. The motivation was to cut out that amount of money being spend, meaning that amount in taxes having to be raised.

KUTTNER: Yes, but on the Democratic side, the motivation was: How do we get rid of a program that has become perverted, and retarget that money to improving the lot of the poor, to get them to go up the ladder rather than being in a permanent condition of dependency. And Peter Edelmann, Mary Jo Baine, David Ellwood, the assistant secretaries of HHS, who spent four years loyally working for this man and who were completely sold out when Clinton signed that bill, who were the ones who resigned in protest, that was very much their view. And they represent the best of a generation of liberal welfare reformers, and who believed, as I think most Americans do, that AFDC had become a travesty, it had become a burden on the taxpayers, it had become a self-defeating program for its intended recipients. But that doesn’t mean you let people just go destitute on the street. The solution is not to return to a Dickensian world.

HEFFNER: Now, “Everything for Sale”, the title of your book. I know people who would say, “He writes ‘Everything for Sale’. Ask him a question: Am I my brother’s keeper?” Those are not disconnected titles or notions. And I do wonder what your answer is to that.

KUTTNER: I think every society needs a balance between individualism and solidarity. “Solidarity” is not a word you hear very much in this society except at labor rallies. But we need a degree of social compassion and social solidarity. It’s a phrase that European social democrats use a lot. I pay taxes to send other people’s children to school, even though my children are no longer of school age. There are governors in this country who think that people who are not of the age that have children in school should be relieved of the burden of paying school taxes. I don’t believe that. I think it’s in my economic self-interest that the next generation be educated. If I expect to collect Social Security when I reach that age, it’s important to me that the next generation be productive enough that they can make the society produce enough gross domestic product so that there’s enough money left over to pay my Social Security. I think one of the real travesties of this debate has been the injection of an idea of generational warfare, that benefits to the elderly come at the expense of benefits to kids, or vice versa. The real debate is between those who would take away what little social provision we have, and those who want to maintain and expand social provision; not a debate between the elderly and the young.

So I think part of this is compassion, in the biblical sense of being my brother’s keeper. Part of it is enlightened self-interest. The fact that, if we want the society to cohere and not be a place where you’re afraid to walk down the street, and not be a place where I’m not sure my Social Security is going to be there because I’m not sure that kids who are coming up are productive enough to generate enough product to have anything left over. If we are to have a society that coheres, it’s not sensible to have extremes of wealth and poverty. And I believe that both out of compassion and out of enlightened self-interest.

HEFFNER: You know, question that I’ve asked myself many times. I think back to Ronald Reagan’s safety net, concept of the safety net. How come (as my grandson would ask me), how come we have not experienced the social turmoil, that we have not experienced in this country, having taking the safety net, to some considerable extent, away, how come we’ve been so fortunate or whatever it is as not to have had the kind of social chaos that one might have expected. You remember we used to talk about next summer was going to be the hot summer in the streets, it was going to be trouble in the streets. And we haven’t had it.

KUTTNER: Well, you know the expression of “The revolution of rising expectations,” the concept that it’s when people think things are getting better that society becomes turbulent. I think this is the flip side of that. I think you lower expectations, you sometimes induce passivity. The Middle Ages lasted for a long time. If you lower people’s expectations, you can have a long period of passivity. I think one of the indicators of that is the declining turnout, the declining percentage of eligible people who bother to vote: 49% in a presidential election last November, the lowest in recent memory. And I think that suggests that so many people have given up on the idea of public remedy. And why wouldn’t they, given the song that both parties are singing? My friend, Paul Wellstone, Minnesota, ran a good Populist campaign; 66 percent of the people turned out to vote in Minnesota. So if you give people something to vote for, people become energized politically. So this is a period when declining expectations have produced passivity. And I don’t think we want a just society, a compassionate society solely to avoid riots in the streets. Even if I had guarantees that there wouldn’t be riots in the streets because of more creative policing, I would still be in favor of a more compassionate, more just society.

HEFFNER: No, I understand that. I’m not connecting them that way. I’m just so darned puzzled, and wonder whether our liberal description of the poor lot of all those many people can be accurate. Where are they? Why aren’t they tearing down where you and I live? We enjoy plenty.

KUTTNER: They are struggling to get through the day. As Jesse Jackson would say, “They’re catching the early bus.” They’re putting bread on the table. They’re worried about where their kids are. And by the time they get home and put supper on the table, protesting in the streets is the furthest thing from their mind. It really is possible for people who are struggling with daily life to become very passive, and very resigned, especially when there is not much of a social movement going on, when there are not leaders who are convincing. And I think this is… I mean, no one denies statistically that the poor are relatively, and in some cases absolutely, poorer than they were 20 years ago. But it hasn’t led to a social movement. And the rhythm of social movements doesn’t operate in perfect synch with the rhythm of economic well-being…

HEFFNER: What are you saying…

KUTTNER: …that the outbreak in the Sixties did not have to do with a sudden change in the economic fortunes.

HEFFNER: Are you saying, “Wait a bit?”

KUTTNER: No, I’m saying that whether or not the result of these social pathologies is that you and I have trouble walking down the streets in safety, these social pathologies need remedy.

HEFFNER: Oh, I don’t argue the point about whether they need remedy. I remember in Aspen at the Executive Institute there when Thurgood Marshall was one of my colleagues there, he would put on his best black accent and say, “Burn, baby, burn.” He tried to get these executives to understand — and this is the early Sixties — the thrust of the movement of the Civil Rights Movement at that time, telling they were too likely to be damaged themselves and their families damaged if they didn’t do something. That’s not exactly what I’m talking about. I’m just wondering where the trouble is.

KUTTNER: Well, you make people sufficiently vulnerable and sufficiently insecure, whether it is by explicit coercion, as in the pre-integrationist South, or in South Africa, or whether it’s via economic vulnerability, as it is for millions and millions of people today, you render them very docile. I mean, one of the reasons why unions aren’t stronger is that people are scared silly. I mean, Dick Freeman’s research at Harvard shows that the odds are, if you sign a union card, you’re putting your job at risk. And in this economy, who in his right mind is going to put his job at risk? So economic vulnerability is a great source of social discipline.

HEFFNER: And you think that’s the answer, rather than that there is, somehow or other, not that much economic vulnerability?

KUTTNER: Oh, I think there’s a ton of economic vulnerability. I think careers and professions, whether you’re talking about doctors or librarians or teachers that used to be layoff-proof, are now on the auction block with everybody else, and…

HEFFNER: But you’re not talking about survival; you’re talking about…

KUTTNER: Well, that’s at the professional end. At the bottom end, particularly with the removal of AFDC and other elements of the safety net, there are people in this society who are desperately poor, desperately vulnerable. And I think many, many more people at all levels of the income ladder are more vulnerable to being peremptorily fired, to be subject to downsizing than was the case a generation ago. And I think that often leads to a kind of turning inward, a kind of blaming of oneself rather than seeing political and social causes, and it doesn’t necessarily lead to political movements.

HEFFNER: What do you see in the future?

KUTTNER: Well, I would like to see a resurgence of the kind of values and politics that I believe in. I think it’s going to be a long, slow climb back. I don’t see many political leaders of this persuasion. I do see a resurgence of the labor movement, to some extent. I do see an intellectual resurgence of people who were skeptical of the simple-minded virtues of utopian laissez faire; but I think so much damage has been done to the institutions that used to sustain the mixed economy, and the right is putting so much money into intellectual combat, and the center is being so corrupted by the need to raise political money, that it’s going to be a long time back.

HEFFNER: It’s interesting you talk about “utopian laissez faire,” and I know you’re playing on the old statements about utopian socialism.

KUTTNER: Yes!

HEFFNER: So you’re saying, “I don’t want to go on either one of those extreme directions.”

KUTTNER: That’s correct. Socialism, communism have been discredited. And the only utopians around these days, except for the Ayatollah, are the people who believe that markets can do no wrong.

HEFFNER: Now, when I asked you the question, I didn’t ask you which way you hoped things would go; I asked you, “Which way do you believe?” In the dark of the night, what do you see happening?

KUTTNER: Well, I think for the next few years…

HEFFNER: Just between us.

KUTTNER: Yeah, just between us. I think for the next few years you’re going to find the political center defined by the likes of Bill Clinton and Al Gore doing a holding action, keeping the system from moving even further to the right. And that creates a little bit of space in which people like me can reclaim some yardage. And I think it will take a combination of rebuilding at the base, and intellectual energy and political energy, you know, before we get the next era of a Great Society or a New Deal. So I think, in the short run, which may be several years, I think the view that markets can do no wrong will probably continue to be ascendant, but I intend to fight it like hell.

HEFFNER: Robert Kuttner, thank you so much for joining me today. And I hope everyone reads “Everything for Sale”.

KUTTNER: It’s for sale.

HEFFNER: Thanks.

And thanks too, to you in the audience. I hope you join us again next time. And if you would like a transcript of today’s program, please send $4 in check or money order to: The Open Mind, P.O. Box 7977, FDR Station, New York, NY 10150.

Meanwhile, as an old friend used to say, “Good night, and good luck.”

N.B. Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.

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