Part I here.
One of the most interesting passages in Listen, Liberal is Frank’s characterization of the Republicans as the party of 1 percent—nothing new here—and the Democrats as the party of the 10 percent—which is the interesting part, and a new idea, at least to me.
What does he mean by “the party of the 10 percent”? It is generally agreed that back in the days of FDR, Truman, and Johnson the Democrats were the party of the Working America (even if the leaders were often recruited from the “aristocracy”, like FDR). Today, however, they are the party of “professionals”: “doctors, lawyers, the clergy, architects, and engineers—the core professional groups—the category includes economists, experts in international development, political scientists, managers, financial planners, computer programmers, aerospace designers, and even people who write books like this one.” And college professors. (Parenthetically, although I and my university colleagues would surely object to be called the “elite”, that’s how the fly-over America thinks of us. We are branded as the “East Coast Liberal Elite.”)
Returning to Frank’s point, the 10 percent are the technocracy, the credential class, the meritocracy (“meritocracy is the official professional credo—the conviction that the successful deserve their rewards, that the people on top are there because they are the best”). They believe in the power of education. “To the liberal class, every economic problem is really an education problem, a failure by the losers to learn the right skills and get the credentials everyone knows you’ll need in the society of the future.”
Much of Frank’s book is a historical account of how the Democratic Party abandoned the 90 percent and became the party of the professionals (the “10 percent”). One important chapter in this story is how Bill Clinton rammed the NAFTA (North American Free Trade Agreement) down the throats of the (then) reluctant Democratic legislators.
The agreement was not a simple or straightforward thing: it was some 2,000 pages long, and according to the reporters who actually read it, the aim was less to remove tariffs than make it safe for American firms to invest in Mexico—meaning, to move factories and jobs there without fear of expropriation and then to import those factories’ products back into the U.S.
Frank’s “favorite” group of professionals are the economists, “a discipline that often acts as an ideological cartel set up to silence the heterodox.” Back in the 1990s 283 economists signed a statement declaring that the NAFTA “will be a net positive for the United States, both in terms of employment creation and overall economic growth.” In 2010 a study calculated that almost 700,000 American jobs were lost thanks to the treaty.
Source
Economists tell us that globalization—free trade, free movement of capital and people—is an unalloyed good. Not true. It all depends on the details. In fact, economists know that—in technical papers, published in academic journals, they discuss under what conditions free trade between countries could benefit their economies, and under what conditions some countries lose, while others gain. But when economists talk to the press, they suddenly forget all the nuance, and turn into free market fundamentalists. It’s an interesting topic, and perhaps I will address it in a future post. But what’s important for the issue in hand is that the American workers are not stupid and they know that they are fed bullshit. When you go to a meeting with your company’s CEO and other corporate officers and they tell you that you either accept a pay cut, or they will move the factory to Mexico—who are you going to believe, your own experience or the Theory of Comparative Advantage? And then, a couple of years later, despite you having agreed to a wage cut, they still move the factory to Mexico.
The problem with NAFTA and other free trade agreements is that they were written by the corporations, for the corporations. Is it surprising that the Democratic Party has been losing the support of the Working America?