Immaculate Conception?

Seymour Martin Lipset begins his latest soray into
American Exceptionalism in the Winter 2000 Wilson
Quarterly asking if Marx may have been right about
something. Supposedly, Marx had referred to the US
as the most developed nation and the image of the
future, but his correspondence with Henry Carey and
others casts some doubt on this. His critical commentary
of their economics seems to indicate a rather superficial
vision of the American economic system which scarcely
can be construed as indicative of any inclination
toward viewing it is such terms. Still, it would be
remarkable were it to be established that Marx was
correct about something. Anything!

America, the story goes, is exceptional in the world
in that it almost exclusively has not developed a viable
socialist movement or party. Rationale for that viewpoint
abound. That it was never a feudal state is one of the
more popular ones. That it has debunked every tenet of
the socialist faith would be a better one.

The solution to the puzzle is contained in Lipset's
article, though I am not certain that is his intent.
He devotes much attention to the 'Third Way,' a supposed
path between capitalism and socialism, championed by
some western leaders including Clinton. That is mere
subterfuge. It simply is not the case that there has
not been a socialist component in American politics.
There has been and there is now. It is the progressive/
liberal/social democrat/third way/populist crew and
their programatic efforts.

That is not Lipset's argument. He wants to offer this
Third Way socialism as the uniquely American image of a
future alternative to capitalism and socialism. This
'retreat from socialism' Lipset structures is an
Orwellian wonder.

Let us envisage, if we can, a slightly different vision
of the last two decades of the 20th century. It is
early 1980 and the Volcker Fed is cutting interest rates
and the economy begins to rebound. In the weeks before
the fall election, 'somehow' Carter achieves the release
of the Iranian hostages (perhaps through the good offices
of Ramsey Clark who, as Carter's personal representative
to Iran before the hostages were seized, was urging Iran
to take such an action in a letter published on the front
page of the New York Times). In any event, the Gipper is
not elected. Instead, Carter narrowly wins a second term,
aided in part by the third party campaign of John Anderson.

What proceeds on that is speculation only in degree. Who
the party standard-bearers would have been in largely
irrelevant. Carter may have been followed by Mondale in
84 and 88, with perhaps Cuomo in 92 and 96m with maybe
Clinton offering his services beginning in 2000, or perhaps
his boldness and hubris would have brought him to the fore
in 1992 just as it did. Regardless of the characters,
the presumptive empirical results would have been as
unaltered as they would have been different from what
did, in fact, occur.

Three initial great differences leap to our attention.
First, the landmark tax cuts of Reagan would not have
occurred, and the twenty years of economic progress they
fueled would have been replaced by a continuation of the
malaise, as spending ran ever more rampant than it has
and revenue increases trailed considerably what came
about as a result of those tax cuts. And, with that,
deficits would have soared without flagging, the dependency
state would have exploded at a raised level of increase.
Perhaps even that expanse would have been augmented by
successful adoption of one of the long time progressive
saws, whether that be Carter's National Youth Corps or
Clinton's (et al) National Health Care scheme. With a
substantive majority in Congress what could have prevented

Secondly, it is highly dubious that 1989 would have been
quite the year that it was. Had Andropov 'dropped off,'
it is a cinch that the sick Soviet regime would not have
replaced him with Gorbachev in any event, that coming in
large measure as a reaction to what Reagan was effecting,
and the declining fortunes of the evil empire. The entire
eastern bloc, had it not remained in tact quite as it was,
would not have experienced the implosion it did, and a
resolute totalitarian regime might have marched into
perhaps bloody marshall law as it stumpled along.

Finally, with the rising malaise and dependency, there
would have likely been not only no global boom, but no
Revolution of 1994, even given the perpetuation of
stagflation. It is interesting to note that the major
variable in the altered state would have been the absence
of the policies undertaken by Reagan.

By the close of the century, we would have been mired
in quite an altered state of affairs. Without Reagan,
we would find ourselves in a forced march toward the
Third Way Lipset sees as the unique American vision.
Rather than posing the prospective of an end of the
'progressive century,' instead of any retreat from socialism,
we would have arguably seen the structuring of a vast
collectivization of our economy in a corporatist regime
which our actual experience only can hint at.

With that, rather than the reduced marginal tax rates
enacted, they would have been of necessity and on faith
increased. Indeed, despite Kemp-Roth, by the close of the
century, America was saddled with the highest level of
taxation in its history. Part of that is attributable
to the several deals to salvage the social security system
hammered out over the last three decades. But the FICA
tax would have had to have been made even a greater
burden even earlier had it not been for the economic
expansion since 1982, and the impending crisis in the
system would have reared its head sooner, as well. Of
course, that would mean that the movement toward a
balanced budget would not have occured, either.

There is no actual balanced budget. It 'appears' so
because the social security budget surplus offsets the
general operating deficit. That deficit is reduced on
the enhanced revenue of lower marginal tax rates,
consequent economic growth, and accompanying fiscal
restraint. It would be only further on the public sector
albatros expansion that we would have had under a more
'progressive' last two decades.

The movement toward dependency would have become a race
which could have surpassed even the ambitious Clinton
proposals for nationalized health care and Reich's
national employment security commission, although we
might have been spared Clinton's suggestion of federal intrusion
into the stock market with the social security surplus,
which would have in short order brought about federal
ownership of the means of production, because that
surplus would not have developed. Dependency's triumph
would also have meant a further looting of our defense

E.J. Dionne says that the rhetoric of the Third Way
social democrats accepts 'capitalism as a given,' but
they want to remedy its inequities, utilizing buzz words
like community and solidarity over socialism or
collectivization. What Lipset recognizes is that the
Third Way is socialism's response to the new world of
production -- post-industrial, service and information
oriented, consumption driven. But what he also infers
is that it also transcends the old bases, such as labor,
but this is lawful for its corporatist agenda. It is also
vital that it be understood that the structure of production
is a contingency, one fundamentally fueled by the tax
reform and fiscal restraint under and following Ronald

Lipset nevertheless maintains an element of American
exceptionalism. Indeed, the US has led the way toward
Third Way populism in his estimation, but it is still
distinct at least in degree -- less statist, with lower
taxes, more religion, more production, wealthier, with
less social spending, and more individualist, than, say Europe.

But here, Lipset may be conceding an important point
without recognizing it. He wants to argue that the US
is 'among the leaders in the unequal distribution of
income,' using the Gini coefficient, but there also is
a correlation between that supposed fact and America's
higher income levels and productivity. Public sector
expansion is a drain of the private sector. But Lipset
concludes with a confession of the American public's
seeming lack of commitment to greater equality; one,
of course, enforced by government. Not fully acknowledged
is that the Third Way social democrats of the progressive
century seriously compromise the assertion that the US
is exceptional. Lipset is strikingly moarnful. But then,
there are those political scientists still waiting for
the next realignment, having missed at least two of them.
Neither have they recognized the contribution of the
burgeoning public sector and growth of dependency as
factors in such realignment or lack of it.

The entire notion of American exceptionalism is a ruse
that ignores the reality of progressism's collecivization.
The Third Way may be more corporatist than Marxist, but
in spite of the differences, it is collectivist nonetheless,
and its arc is toward Malthusian totalitarianism. That we
recognize the congruence of the so-called 'right' and the
left is no longer sufficient. The Third Way goes there,
too. American may be exceptional, but that is not because
it is unencumbered by collectivism.

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