STOCK MARKET WATCH -- Monday, 24 December 2012

[Demeter]

17. Taxes, and Cuts, and Drones: Obama’s Imperialism of the Peasants

http://coreyrobin.com/2012/12/17/taxes-and-cuts-and-drones-obamas-imperialism-of-the-peasants/

In my very first post as a blogger, I wrote the following:

One problem with liberals in the tax debate is that they don’t realize just how little Americans actually get from the government. When the government doesn’t provide you with universal health care, a decent pension, good schools, or accessible and affordable public transportation, why should you want to pay taxes? The answer, of course, is not for Americans to pay less but for government to spend more. As Thomas Geoghegan explains here, “people are willing to pay taxes that they spend on themselves.”

Ezra Klein is now reporting more details on what the impending fiscal cliff deal between Obama and the Republicans is going to look like: among other things, it includes cuts in Social Security benefits, and if this Dylan Matthews post from last week is correct, tax increases that would be slightly regressive in their effects (I’m not talking here, obviously, about the tax increases that would come from undoing some of the Bush tax cuts).

So that’s the deal: We raise taxes. And what do we get in return? Lower benefits. Genius!

As I wrote in the London Review of Books during the Summer 2011 debt ceiling negotiations:

If there’s a master text for this moment, it’s Marx’s Eighteenth Brumaire. Not the over-cited first time as tragedy, second time as farce line, but his astonishingly prescient analysis of the reactionary behaviour of the French peasantry during the Bourbon and July monarchies. Though the 1789 Revolution and Napoleon had liberated the peasants from their landlords, the next generation of peasants was left to confront the agricultural market from small private holdings that could not sustain them. They no longer had to pay their feudal dues, but now they had to pay their mortgages and taxes to a state that seemed to do little for them. What the state did provide, under Napoleon III, was imperial spectacle. That wasn’t nothing, as Marx noted, for in and through the army the peasants were ‘transformed into heroes, defending their new possessions against the outer world, glorifying their recently won nationality, plundering and revolutionising the world. The uniform was their own state dress; war was their poetry.’ This Marx called ‘the imperialism of the peasant class’.

In Marx’s analysis we see the populist underbelly of the debt crisis, indeed of the last four decades of the right-wing tax revolt, from Howard Jarvis’s Proposition 13 of 1978, which destroyed California’s finances by putting strict limits on property tax increases, to the Tea Party. Liberals often have a difficult time making sense of these movements – don’t taxes support good things? – because they don’t see how little the American state directly provides to its citizens, relative to their economic circumstances. Since the early 1970s, with a few brief exceptions, workers’ wages have stagnated. What has the state offered in response? Public transport is virtually non-existent. Even with Obama’s reforms, the state does not provide healthcare or insurance to most people. Outside wealthy communities, state schools often fail to deliver a real education. In such circumstances, is it any wonder ordinary citizens want their taxes cut? That at least is change they can believe in.

And here Democrats like Obama and his defenders, who bemoan the stranglehold of the Tea Party on American politics, have only themselves to blame. For decades, Democrats have collaborated in stripping back the American state in the vain hope that the market would work its magic. For a time it did, though mostly through debt; workers could compensate for stagnating wages with easy credit and low-interest mortgages. Now the debt’s due to be repaid, and wages – if people are lucky enough to be working – aren’t enough to cover the bills. The only thing that’s left for them is cutting taxes. And the imperialism of the peasants.