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I'm certain that not everyone will agree with me on this, but the political climate in the United States is STILL largely influenced by the legacy of Ronald Reagan. And the DLC represents the faction of the Democratic Party that is most comfortable with continuing this trend.
Reagan's long shadow over the political scene is best seen in the way that market fundamentalism is taken largely by BOTH political parties as an unchallengable fact. The reason that Bill Clinton is labelled by many on the left (including myself) as "the best Republican President we ever had" is because he embraced the philosophy of free-market fundamentalism on behalf of the Democrats. While he wasn't quite as ruthless about it as many on the right, and did push for some modest measures that increased quality of life in lower income brackets, the fact remains that he did by and large endorse the overarching philosophy of Ronald Reagan -- that government involvement in the marketplace should be minimized, and that it should be left to its own devices.
In a sense, this was a repudiation of the legacy of FDR and the New Deal -- the idea that government MUST be involved in the marketplace in order to provide a safety net for citizens and to stop the worst excesses of capitalism. As John Maynard Keynes said when he set out to produce his General Theory of Employment, Interest and Money (1936), his goal was to save capitalism from itself. This line was further advanced and refined by figures like John Kenneth Galbraith in his important treatise, The Affluent Society (1957). The shift to the adoption of monetarist policies like those advocated by Milton Friedman indicated a newfound willingness to allow capitalism to eat itself once again. The policies promoted by the DLC have done little to recognize not only the value, but the necessity of government intervention in the marketplace -- and instead have been aimed toward complicity with the right's goal of reducing government intervention and allowing the market's worst features to rise to the surface (i.e. the rising wealth gap, the erosion of the middle class, job outsourcing, etc.). Of course, "free-market" capitalism was fine in the time of Jefferson, when businesses were small and numerous -- but in the modern-day workplace of mammoth transnational corporations, it is a recipe for disaster.
IMHO, the grassroots Democrats need to repudiate this message. We also need to advocate government involvement in the marketplace in a way that doesn't imply people being dependent on the government, but rather in a way that shows that the government will stick up for and reward those who work hard and live by the rules, as opposed to allowing their job to be shipped to China just so CEO's and shareholders can make a few extra bucks.
Of course, this kind of path will produce an irreparable schism within the Democratic Party. The DLCers will attempt to oppose such an effort at every turn. But, unless we really want to repudiate the excesses of the modern marketplace, this is a chance we have to take. One thing that should be coming clear is that the narrowing of differences between Democrats and Republicans on economic matters is not helping Democrats, because it signals to the electorate that the real ideas are on the other side, and that our side is simply interested in massaging those ideas rather than providing a true alternative.
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