We the Regulators

Practicing progressive politics in 21st-century America can feel like being trapped in a vivid nightmare. You know that everything around you is wrong, you know you should be able to fix it or get out, but it’s impossible—not because of the nightmare’s antagonists but because of the bounded parameters of the dreamworld itself. Similarly, the dystopia that Ronald Reagan, Margaret Thatcher, and Milton Friedman built still controls not only our political destiny but also the very contours of how our brains process social and economic possibilities. We struggle to pass laws that would benefit the working class because we’re constrained by a fear of moral hazard. We strain to invest even in badly needed infrastructure, much less broader human comfort, without budget-balancing “pay-fors.” Property rights are held sacrosanct above human rights. Government action is viewed at best as a necessary evil in otherwise self-sustaining markets.

The resulting economic system is deeply unjust. We demand that the marginalized jump through endless hoops to receive benefits because they might get something they supposedly don’t “deserve.” We refuse to meaningfully tax billionaires who got rich through exploitation because too many legislators believe the ultra-rich should be able to shield their ill-gotten “property.” Even when policy makers must intervene in the economy—as with stimulus payments resulting from the COVID-19 pandemic—it is often construed as a temporary deviation rather than an opportunity to reimagine the relationships between nations, economies, and the people within them. 

There are signs that liberal governments are warming to deeper ideological changes. But in their efforts at reform, they are often met with fierce resistance. Moneyed interests lobby fiercely against any efforts to regulate their behavior. Right-wing populist movements attempt to destroy democracy altogether. And many of the leftists who do attempt an escape from this world find themselves under the sway of equally doctrinaire ideologies with horrific records of implementation. Reasonable people who want to implement a more humane political economy have few footholds to help them not only to organize for justice but also to begin constructing a practical intellectual scaffolding that can hold their system in place.

Ryan Cooper’s excellent new book, How Are You Going to Pay For That?, helps provide just such a grounding. The book’s title may be somewhat misleading: Cooper’s goal is less to promote a new economic theory or write a white paper of alternative pay-fors than to psychologically replace the noxious ideological framework that orients our relationship to markets and to one another. He terms this old framework “neo-propertarianism.” It encompasses the idea that the market economy as it exists is separate from the society and the rules used to organize it, as well as the concomitant political expression that a person’s property is sacrosanct, rather than subject to communally agreed law.

In its place, he outlines a vision of “collective economics” in which we come to understand that the American economy “is a huge collective enterprise wholly dependent on government laws, regulation, and spending, as well as the daily activities of the whole American people and their prior economic history.” Take away the state, and our markets are instead regulated by the ultra-rich and large companies, who rig them to their advantage. 

Under Cooper’s framework, then, taxation, regulations, and spending are all essential and positive. They are the only ways to reach an economics “based on social solidarity.” More of all three, and especially the last, are needed.

If you open How Are You Going to Pay for It? expecting a lesson in modern monetary theory, appropriate debt-to-GDP ratios, or countercyclical economics, you’ll be largely disappointed. It’s not an alternative economics textbook or even a popularizing translation of one, and it doesn’t try to be. Cooper’s work relies on these frameworks in passing as evidence. Modern monetary theory, for instance, stipulates that nations with fiat currencies have unlimited ability to print currency and make investments so long as unemployment remains below full, and that taxation and regulation are the appropriate methods of constraining price inflation. Cooper’s work assumes these ideas as basic reality without foregrounding them as lessons. But one need not even believe in these grounding theories to see the wisdom in his calls for heightened spending. 

Indeed, even as a writer on the left, Cooper is acutely aware of where his compatriots can get it wrong. Some progressive activists have been drawn into more traditional Marxist critiques of capitalism as inequality has risen, but Cooper doesn’t flinch at pointing out the environmental and human rights failures of anti-capitalist states. Instead, he makes arguments that even defenders of capitalism and markets as baseline organizing principles should be able to tolerate, and perhaps even embrace. Societies, he argues, determine the rules for markets, and no market or private property exists without deliberate, socially determined decisions about who has economic legitimacy. 

“The whole economic edifice of business, profits, workers, and so on rests on the state’s structural foundation,” Cooper writes. “This means that the common neoliberal objective of ‘deregulation’ is all but impossible.” There is no such thing as an independent, self-regulating free market. There never has been and never could be. And we as a society have a right to negotiate and determine the rules of the markets to dictate outcomes that function best for people as a whole.

So when and how should we regulate and spend? Cooper has some practical answers, ranging from health care to child care to labor to climate change. But he roots these specific calls in a broader principle. As a general rule, he argues, we should spend money on making people happier and our society more sustainable. Inflation should be controlled via taxation. 

Existing “propertarian” choices in market rules already show what happens when we don’t regulate the economy this way. The active and passive owners of capital and the finance industry will rig the economy instead. They will gain more and more of the benefits of productivity, leading to increasing human misery, slower growth, less innovation, and potential ecological catastrophe. Monopolistic companies like Walmart and Amazon get to force price discounts onto companies who sell items in their stores so they can make more money and grow their market share. 

Some of this structuring might seem like it’s largely the product of passivity, like the government’s failure to enforce antitrust regulations. But this is still a decision. And in plenty of other cases, the government is far more active in creating unjust economic systems. The U.S., for example, has bizarre and structurally racist housing rules that, Cooper writes, result in “low-density sprawl [that] eats up land and makes public transit, walking, or cycling very difficult.” We subsidize corporations that exacerbate the climate crisis and reinforce the various carbon-based infrastructures that support their profits.

The good news is that these systems are ultimately a choice. All we need to do to fix these problems is change the rules accordingly. And we shouldn’t be shy about it. Instead, we should spend and regulate with the open and proud knowledge that we are indeed picking winners and losers—because every system of market rules already
does that. 

Antonio Gramsci famously said that “the old world is dying and a new world struggles to be born. Now is the time of monsters.” Buffeted by a pandemic, extreme inequality, and a brewing climate catastrophe, we are ourselves in between systems. It is indeed a frightening time. But Cooper’s work should be able to help bring a more just world into being, and snap away some of the monstrous ideologies that have led to untold misery over the past half century.