Democracy is facing an uncertain future in the United States as President Donald Trump continues to spread baseless claims that our voting system is “rigged.” Historian Sheri Berman writes in her new book that capitalism can no longer deliver prosperity for all citizens and, as a result, optimism about our collective future has been replaced by “fears that democracy is in retreat.” We often assume that capitalism and democracy go together, but very often throughout history, Berman points out, they have been in conflict.
In The Political Consequences of Economic Ideas: Neoliberalism, the Left, and the Challenges Facing Democracy Today, Berman, a professor of political science at Barnard College, Columbia University, explores the connection between changes in the structure of capitalism and the decline of democratic practices. As post-World War II economic growth faltered, center-left political parties in Western Europe and the Democrats in the United States embraced ideas and policies popularized by right-wing economists like Milton Friedman. The embrace of neoliberal ideas were choices, not predetermined outcomes, Berman argues.
In the United States, center-left politicians could persuade a majority of voters to vote them into power, Berman argues, but only if they avoid policies that “appear zero-sum, where one group’s gains appear to come at the high cost to another.” If radical right-wing populism has thrived by both creating and pushing against the social and cultural cleavages in society, progressives do best when they campaign for universal policies that benefit middle and working-class people.
Berman spoke to Capital & Main from her home in New York City.
This interview has been edited for length and clarity.
Capital & Main: Your book is partly about the relationship between democracy and capitalism. Most people ask, “Is the economy working for me,” rather than “Is capitalism working for me.” Why should we look at the economy through the lens of capitalism?
Sheri Berman: Most people who are not academics don’t use the term capitalism — they may think about markets, or the economy or something narrower than capitalism, which academics think of as all aspects of the economic system as well as social, labor and other relations that are part of it. That said, it is important for us to talk about how capitalism, or more narrowly the economy, relates to government and vice versa if we want to understand the challenges facing Western societies today.
There was an economic era after World War II that lasted until the mid-1970s when the American and European economies generally worked pretty well. In the mid-’70s this prosperity started to unravel. What happened?
There’s simply no doubt that there were 25 to 30 years where you had that fabulous combination of historically high levels of growth with growing equality. Not only was the pie growing but the slices of that pie were becoming more evenly distributed. Workers and people below the median income saw their incomes growing, and this was supplemented by generous welfare state social provision. There was a sense that the less privileged groups were gaining from the postwar economic order. The trade-offs that many economists had thought existed — you couldn’t have growing profits and growing wages, you couldn’t have growth without increasing inequality — seemed to not be the case during those postwar decades. Cracks began to show in the postwar system in the 1970s and by the end of the 1980s, it’s pretty clear that we are now in a different era.
When the economy stops performing, a common response is deregulation of the economy, globalization of finance and jobs, direct attacks on unions. You had Margaret Thatcher becoming prime minister in Britain in 1979 and Ronald Reagan was elected president in 1980 on an anti-government platform. How did that impact our politics?
While this neoliberal shift begins on the right with politicians like Thatcher and Reagan, what makes it hegemonic is that it also reshapes the center-left, led by politicians like Tony Blair in the U.K. and Bill Clinton here. Over time, this neoliberal policy shift creates economies that have generated almost the flip side of what existed during the post-war period: slow growth, rising inequality, relatively high unemployment particularly in Europe, low productivity gains and weaker unions. Cumulatively, these trends stress not only the working but also much of the middle class.
Since the center-right already favored these reforms, it seems that more political damage was done to the center-left parties.
Yes. Nobody was voting for the center-right because they wanted to expand welfare states, because they favored increasing equality, because they were in favor of increasing the power of unions. But the center-left parties had said we are going to fight for policies that are good for workers, that will benefit the underprivileged, and these policies will be good for society overall.
By the 1990s that was no longer part of what the center-left was selling: It changed its brand. Once the negative economic consequences of neoliberalism became clear, there was less and less reason to vote for the center-left, especially if you were a working class, noncollege-educated voter for whom the center-left’s economic profile was the main attraction to these parties in the first place.
What explains the rise of Trump and right-wing populist parties?
First, there’s a lot of evidence that negative economic consequences have created contexts within which right-wing populist zero-sum appeals can thrive. These parties tell people the system is rotten and it’s the fault of immigrants, elites, minorities demanding special privileges and so on. If we go back to the postwar period, the economy was able to generate rising incomes and more social mobility for almost all groups.
Today it seems more like one group’s gain is another’s loss. This sort of zero-sum mentality creates fertile ground for polarization and the demonization of groups that seem to be getting more than they deserve, taking away public resources and so on.
You point out that the policy orientation of our major parties changed.
Up through the postwar era, political competition was primarily focused on economic issues. They fought primarily about things like tax rates, the size of the welfare state and the public sector. People accordingly voted primarily on the basis of their economic preferences and class identities. Today, economic issues matter, but so do social and cultural issues like immigration, national identity, religion, sexual and gender roles and identities and so on.
At about the same time that center-left parties moved away from their traditional economic profile and adopted more “neoliberal lite” ones, they also began moving dramatically to the left on social and cultural issues. To a lesser extent, so did center-right parties, becoming more liberal on social and cultural issues.
You write in the book that Trump’s presidencies have radicalized the left, not the right. But haven’t they radicalized both?
Clearly, Trump has radicalized the right, but he is also the culmination of a radicalization that preceded him. He took advantage of and benefited from long-term trends within the Republican Party.
It is also important to pay attention to how he has radicalized the left as well as he pushed the Democratic Party more generally in directions that are not good for democracy overall.
One clear example is the gerrymandering fiasco, which is antithetical to democracy. Once the Republicans, under Trump’s urging, began gerrymandering everywhere, the Democrats really could not stand down, despite the fact that in many states they had championed reforms to ensure nonpartisan or independent district drawing. Gerrymandering overall hurts democracy.
I think our historic task at this moment is to hold back a rising tide of profound authoritarianism. How should progressives or Democrats respond?
We are surely facing a president who does not care about democracy or democratic norms and institutions. And he has created a Republican Party that is willing to ignore if not condone his behavior. So yes, the Democrats’ priority has to be defeating the Republican Party in its current Trumpist form.
But the polling tells us that while Trump has grown increasingly unpopular, the Democrats remain remarkably unpopular as well.
If the Democrats don’t deal with their internal divisions — between radicals and moderates — and manage to unite around a platform that can prove attractive to a decent number of wavering and independent voters, they could still lose in 2028 and then face a Republican Party that will remain a radical threat to American democracy.
