After witnessing the debates for Democratic presidential candidate in the US and those for Conservative prime minister in the UK, I’m struck by one glaring omission in any discussion of what’s needed to fix the terrible polarization afflicting both countries.
The answer may lie in an article I read a number of years ago, entitled ‘The Broken Contract’ by New Yorker writer George Packer, which I want to tell you about again.
I left America for England in 1980 to research a book. I fell in love with London, and not long after fell in love, and as I got further and further entangled with the place – first with husband, then house and children, business and pets – I basically never came home.
Over the years, whenever I did get back to America, it began to resemble the place I’d left less and less. Roads and bridges and airports began to look careworn and ultimately to fall apart, but something else, more fundamental was missing that I could never put my finger on – some growing sense of absence of the whole holding it all together.
And while that uneasy feeling did not appear to extend to Britain, it began to overwhelm me ever since the Referendum result in 2016 created the huge division now present in my adopted country.
Packer wrote that the America of 1980, the America I remember before I left to live in the UK, had a ‘social arrangement,’ an unwritten social contract among labor, business and government, or as he puts it, between the elite and the masses, to ensure that the economic growth following World War II would be spread far and wide, with more shared prosperity than at any time in human history.
This ‘social arrangement’ was achieved through two factors: a balance of power and an overwhelming sense of responsibility. At the time labor laws and government policy maintained the balance of power between workers and management and owners, to restrict the amount of money that could be amassed in private hands or by higher management.
At the time, top executives earned only 40 times as much as their lowest-paid employees (a figure that would swell tenfold 25 years later). Regulation prevented the speculative bubbles and crashes like that of 2008; and banks were not casinos, but a very safe pair of hands.
Most important of all was the unwritten contract by the country’s elite – the heads of banks, corporations, universities, media as well as the government.
At the time, as Packer puts it, ‘they saw themselves as custodians of national institutions. . . they rose above the country’s conflicting interests and tried to unite them into an overarching idea of the national interest.’
A number of organizations included on their boards not only business leaders but heads of labor and civil rights activists.
From our 21st century perspective, it is almost unimaginable that the business elite supported Social Security and labor unions, but at the time they did – because they believed, says Packer, that it would ensure social peace and a productive economy: ‘This is how elites once behaved: as if they had actual responsibilities.’
Even more astonishing, at the time I left the US, bipartisanism between the two political parties was routine.
The turning point
In the midst of ‘stagflation,’ in the latter 1970s, it began to dawn on businesses that they’d survive better if they focused less on an obligation to act as custodians of the national interest and more on how to turn a profit.
At the very point I left America, the lobbying and political business, which had been a behind-smoky-doors gentlemanly activity in the early 1970s, had begun moving toward big and highly influential business; within 10 years the amount spent on political campaigning would quadruple and the number of lobbyists would increase twentyfold.
By the end of the 1970s, three very popular reform bills would have given the public an opportunity to appoint consumer advocates in government, close some small loopholes in taxation for the wealthy and make it harder for employers to circumvent labor laws.
All three had public and bipartisan support in Congress, but nevertheless got shot down in flames, the casualty of the first ferocious lobbying by big business.
Thereafter, we know the rest of the story: a widening inequality created by corporate and political interests so that while ordinary middle-class Americans observed their income rise by only 21 per cent in the 30 years since I left the US, the top one per cent has seen their incomes increase more than 10 times that – by 256 per cent. And this move toward ever greater inequality now feeds on itself.
The torn contract
Nevertheless, as Packer says, the most important change is the tearing up of the unwritten social contract – what the American elite have become willing to do compared to what they would have done before 1980.
‘In 1978 it might have been economically feasible and perfectly legal for an executive to award himself a multimillion-dollar bonus while shedding 40 percent of his work force and requiring the survivors to take annual furloughs without pay,’ says Packer. ‘But no executive would have wanted the shame and outrage that would have followed.’
Now, of course, there is no shame and outrage anymore. We have become so inured to income inequality that this kind of behavior carries on mostly unremarked upon – except by the Democratic left, who suggest that inequality is undermining America – but more to the point, as Packer says, undermining democracy.
I now recognize that what I was experiencing over the years, every time I returned to America, was a kind of shock in the growing sense that the contract – the idea that those in charge have some sort of responsibility to do something other than stick their noses in the trough – had been torn up and scattered to the four winds.
As Packer quotes a friend, speaking about America’s shoddy business dealings in Iraq, ‘We’re just not that good anymore.’
Much is being discussed about ‘uniting the country’ on both sides of the Atlantic but that battle cry is difficult to articulate in particulars, other than in promises to increase taxes and government programs or lower them and assist businesses to thrive.
What is needed is something more fundamental than government programs that penalize business (American democrats) or lower taxes to give business a boost (UK Tories).
In the debates, my friend Marianne Williamson, who’s in the presidential race, called for the need for a return to love in politics.
What we need is nothing less than the recovery of the social contract: the agreement of an overarching idea of the national interest. Only once we recover that sense of requited humanity can something resembling true unity finally re-emerge.