Building the Future on Solid Ground
The Pitch: Economic Update for December 23rd, 2021
(The Pitch is a weekly economics newsletter written by Zach Silk. Sign up for free on Substack to receive a new issue in your inbox every Thursday.)
Friends,
This year, my family was delighted to be visited at our front door by a group of caroling neighbors. It felt especially poignant to join our neighbors in song for a few minutes this year because their caroling marked the resumption of an annual tradition in my neighborhood that didn’t happen last year due to pandemic lockdowns. I’m a sucker for the holidays precisely for moments like that — opportunities to reflect on the values that unite us, and to celebrate those values through traditions that we share with friends and family and community.
But it’s a complicated time to celebrate togetherness, because many of us have never felt so far apart. A vast (and, seemingly, growing) partisan divide threatens to consume nearly every aspect of the American experience, to the point that trips to states on the other side of the political spectrum are starting to feel more and more like journeys into foreign nations.
I at least take some consolation in knowing that this isn’t a uniquely American problem — every industrialized nation is dealing with its own version of partisan rancor. It seems to be a universal feature of democracy in the 21st century — though it must be said that some nations are certainly dealing with this crisis better than we are.
Earlier this month, Amory Gethen announced a new paper that takes a comprehensive look at political cleavage in more than 20 democracies worldwide over the last 70 years. The study offers a much-needed bird’s eye view of the shifting tides of democracy, providing much-needed context to our current situation, as well as a potential glimpse into the future. Gethen uses a staggering amount of data to prove that a sweeping global political realignment is underway, centering largely around widening income inequality.
“In the 1950s, left-wing parties were supported by both low-income & lower-educated voters,” Gethen writes. That has changed over time, with American liberals in particular losing support with lower-income voters. Throughout the study, conservative parties worldwide have tended to enjoy growing support from the wealthiest voters and liberal parties have amassed support among highly educated voters.
Gethen also says the report has tracked a long dissolution of communist parties over the last seven decades, along with growing support of anti-immigration conservative parties and green liberal parties. There’s a lot of data here to parse, but the report seems to be signaling an important realignment in global politics that is accelerating in places with greater income inequality. In nations with less inequality, the realignment is slower and less rancorous. In nations where inequality is greater, the divide is sharper and more violent.
What does this mean for our current moment? As we know from history, these heightened moments of political realignment are often crisis points that result in revolutions or civil wars. But that doesn’t have to be the case this time. We study history so that we can avoid the mistakes of the past.
One thing should be clear to anyone glancing at Gethen’s study: Simply expecting the old political alignments and identities of the past to hold fast into the future is a fool’s errand. We watched a brash wave of conservatives employ the language of economic populism to activate millions of new followers in democracies around the world over the past few years, wooing voters who were always considered part of the other party’s solid constituency. But anyone who despairs at the evidence of crumbling alignments is willfully seeing a half-empty glass. The report is full of opportunities, too.
My first takeaway from the report is that if they truly want to end the widening partisan divide, our leaders should do whatever they can to reduce and reverse the trend of income inequality that has wracked the nation since the 1970s. The Biden Administration has made great first steps toward increasing wealth at the bottom of the income scale, and they need to move quickly to keep that trend moving in the right direction.
My second takeaway: as we head into 2022, it’s time for us to excise the phrase “because that’s the way we’ve always done it” from our political vocabularies. Now is the time for our political leaders to reach out and forge new alliances — to expand into the communities that we have taken for granted and ignored and to find new common ground that reflects the political realities of the moment.
That common ground should be built on the facts that will always be true. We all want the best for our families — to provide for our children, to help them live better lives than we had. We all want to feed the people we love, to feel secure in our homes, to not feel anxious about whether our next paycheck will arrive on time–or even if it will arrive at all. Those economic truths have been paramount for as long as humans have gathered in society, and they’ll remain true. The people who can speak best and legislate most effectively on those topics will lead the way for generations to come.
This holiday, as you connect with your friends and family and neighbors, I hope you’ll give some thought to that common ground that we all share, because that’s the foundation on which we’ll build the future. We at Civic Ventures wish you and yours a very happy holiday season.
Be kind. Be brave. Mask up. Get vaccinated — and don’t forget your booster.
Zach
P.S. Next Thursday, we’ll be delivering something a little different into your inboxes — an overview of the year’s economic developments from Civic Ventures founder Nick Hanauer. I’ll be back in the first week of the new year with the latest in economics news and analysis, as always.
