The Rhetoric of Redistribution: Lessons From the 1930s
Joseph J. Thorndike is a contributing editor with Tax Analysts. E-mail: email@example.com.
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Joe the Plumber is a late-breaking star of the presidential campaign. Since confronting Democratic presidential nominee Sen. Barack Obama of Illinois during a campaign stop earlier this month, Joe Wurzelbacher has become a media darling, a stand-in for "average Americans" everywhere. In the process, he's given a star turn to a key policy issue: redistributive taxation.
In their six-minute exchange, Wurzelbacher challenged Obama on his plan to raise taxes for those making more than $250,000 a year. The nominee began by noting his promised tax breaks for small business. Eventually, however, he took the bait. "I think when you spread the wealth around, it's good for everybody," he said.
It's been a while since a leading Democratic nominee promised to share the wealth (hat tip to Huey Long). But it's about time.
Over the past several decades, American liberals have lost the ability to talk candidly about redistribution. Sure, they've sometimes dabbled in the language of social and economic justice. Occasionally they've even tried to act on it. But for the most part, modern liberals (or progressives, as they style themselves today) have approached the issue obliquely -- or not at all.
And that's too bad, according to Ben Jackson, an Oxford historian writing in the online journal History and Policy. In a recent article exploring redistributive rhetoric in British politics (http://www.historyandpolicy.org/papers/policy-paper-76.html), Jackson considers the American experience to make his central point: If progressive politicians want to leave a lasting mark on social and political institutions, they need to relearn the distinctive dialect of economic justice.
Jackson isn't shy about his political inclinations. He regards modern-day conservatives as bogeymen, eager to jump out from the dark recesses of well-funded think tanks to attack progressive government generally and progressive taxation in particular. That threat may seem modest today (as opposed to, say, five minutes ago, when most of us thought Republican presidential nominee Sen. John McCain of Arizona still had a chance). But progressives have no room for complacency. "If recent political history teaches us anything," Jackson writes, "it is that the extreme libertarian think-tank pamphlet of today can easily become the government policy of tomorrow."
Jackson spends a good deal of his time on the British experience, including the Liberal Party's welfare reforms of the early 1900s and the Labour Party's postwar platform of the 1940s and 1950s. Such episodes can be illuminating for Americans, but the contextual and historical differences tend to outweigh the similarities.
But Jackson is also fascinated with Franklin Roosevelt and the New Deal. The hallmark of New Deal politics was economic populism, he contends. FDR's world was populated with villains (bankers, big business) and heroes (workers, farmers). For much of his presidency, FDR tried to pit those groups against each other, marshaling the many against the few. At times he did this in strikingly personal fashion: He had a penchant for naming names, and he gloried in the public disgrace of "economic royalists" (and especially wealthy tax avoiders).
Call it the vindictive style in American politics, but it was nothing if not successful. It worked, at least in part, because Roosevelt cast his political agenda as part of a larger national narrative. "He drew on a perennial republican theme, deeply entrenched in American political culture: the danger posed to the common good of the republic by the accumulation of power and influence in the hands of a self-centred minority," Jackson writes.
FDR was adept at wrapping New Deal policies in the "American" label. He even managed to brand his tax policies. "Taxation according to ability to pay, argued Roosevelt, was 'the American principle,' and the New Deal had 'Americanised the tax structure' by introducing greater progressiveness," Jackson writes. "As a result, Roosevelt argued that his administration had created 'a safer, happier, more American America.'"
Jackson calls this a "discourse of social patriotism," and he holds it out as an example for today's liberal politicians. "By invoking the nation, progressive politicians spoke about a shared identity that transcended class loyalties and contrasted an inclusive community with the exclusive privilege enjoyed by a minority," he writes. Social patriotism can help forge coalitions between low- and middle-income voters, giving progressive politicians a powerful electoral boost.
FDR's tax rhetoric was not equalitarian. He endorsed a broader distribution of wealth, but he was careful to avoid any call for wholesale redistribution. Instead he promised to break up "concentrated" wealth, which posed a threat to economic and political freedoms, not to mention social harmony. "Our revenue laws have operated in many ways to the unfair advantage of the few," FDR declared in 1935, "and they have done little to prevent an unjust concentration of wealth and economic power."
Roosevelt defended redistribution as a function of economic development. In the modern world, individuals had no exclusive claim to material wealth. Quoting Andrew Carnegie, he noted that "where wealth accrues honorably, the people are always silent partners." As he went on to explain:
The movement toward progressive taxation of wealth and of income has accompanied the growing diversification and interrelation of effort which marks our industrial society. Wealth in the modern world does not come merely from individual effort; it results from a combination of individual effort and of the manifold uses to which the community puts that effort. The individual does not create the product of his industry with his own hands; he utilizes the many processes and forces of mass production to meet the demands of a national and international market.
Those were powerful and convincing words when Roosevelt spoke them in 1935, all the more so because FDR underscored them with an implicit threat:
Social unrest and a deepening sense of unfairness are dangers to our national life which we must minimize by rigorous methods. People know that vast personal incomes come not only through the effort or ability or luck of those who receive them, but also because of the opportunities for advantage which Government itself contributes. Therefore, the duty rests upon the Government to restrict such incomes by very high taxes.
Roosevelt's rhetoric helped propel the Wealth Tax Act of 1935 through Congress, raising rates on estates and large incomes. It came during the high tide of New Deal reform, when Roosevelt indulged in the most passionate class-based rhetoric of his presidency (up to and through the 1936 presidential election).
But for all its apparent radicalism, FDR's tax talk never strayed from its majoritarian moorings. As Jackson notes of successful progressive appeals on both sides of the Atlantic: "Redistribution was not presented by these politicians as advancing only the interests of 'the working class' or 'the poor' but as a majoritarian project that improved the economic position of the average citizen and was opposed only by selfish interest groups pursuing a narrow sectarian agenda."
This rhetoric of redistribution is not always pretty or admirable. At times it can be downright ugly. But it has also been notably successful. For the most part, the Obama campaign has avoided the less attractive elements of New Deal rhetoric, avoiding the demonization of enemies (except perhaps when it comes to Wall Street financiers). But it has retained the social patriotism that defines low- and middle-income interests as broadly "American" interests.
This may help explain why most of Joe the Plumber's friends seem poised to vote for Obama.