George W. Bush hasn’t even spelled out the details of his plan to privatize Social Security and it’s already in trouble, even among some Republican lawmakers–for good reason. There’s mounting evidence that privatization won’t solve any of the system’s financial problems, which loom far in the future and can be easily fixed, but it will worsen the government’s fiscal condition and reduce future benefits even below what would result if Congress did nothing at all.
Yet Bush will likely push ahead with this cornerstone of his “ownership society”–an agenda rooted in decades of right-wing opposition to the New Deal, driven by ideology and political strategy as well as a brazen desire to help the rich get richer. Progressives can and should fight privatization by highlighting its blatant shortcomings, but they must also confront the long-term strategic battle of which it is a part.
Bush’s ownership society is a cleverly packaged assault on the idea that government should work for the common good and that there should be an expansive social contract. It advocates shrinking and privatizing government (including Medicare), undermining public education through vouchers, and reducing taxes on accumulated wealth. It even involves moving away from comprehensive government- or employer-provided health insurance to high-deductible “health savings accounts”–which will provide tax breaks for the rich, help few of the uninsured, prompt businesses to dump traditional health insurance for their employees and give less healthcare and more money problems to most people. The ownership society further shifts risk from corporations and the government to individuals–promoted as enhancing personal choice–and transfers income and wealth to those who already have it.
The ownership society gambit is part of the Republicans’ class warfare. By encouraging people of middling income to think of themselves as owners of some small bit of property, the right hopes to create an “investor class” that links every owner of a bungalow or paltry private retirement account with executives and the economic elite–the 1 percent of Americans who own more corporate stock than the bottom 90 percent. As an article in National Review, reprinted in the Republicans’ Social Security playbook, argues, “Participation in capital markets changes people’s political attitudes and behavior” and “pro-investor policies tend to perfect themselves over time,” so that small tax breaks “generate a constituency that wants bigger tax breaks.” The hope is that every private-account holder will see trial lawyers, government regulation, corporate taxation and union drives as a threat to his or her retirement security.
There is a long tradition of American capitalists not only mobilizing small-business and professional support for the elite, but also shifting working-class aspirations to undermine the potential of radical labor and political movements. Instead of delivering on the promise of upward mobility, American capitalism in the late nineteenth century delivered home ownership as a substitute for owning one’s land or tools. After the elites forcibly smashed working-class organizations, like the Knights of Labor and anarchists, that demanded an end to wage slavery during the post-Civil War industrialization, the workers’ movement increasingly turned toward securing an American, or living, wage instead of demanding control over industry. In the early twentieth century, after Populists and Progressives raised public awareness about the corrupting power of big corporations, there was a wave of interest in industrial democracy as a necessary complement to political democracy. During the 1920s, America began to develop consumer capitalism and a democracy of shoppers alongside a brief infatuation with stock markets.