Restoring civic virtue in America

Part of a weekly series on the economic choices facing the United States and its relations with the rest of the world. For previous entries, click here.
 
The direst threat American society faces today is the collapse of civic virtue. By that, I mean the honesty and trust that enables the country to function as a decent, forward-looking, optimistic nation.

The defining characteristic of the 2016 Presidential election is that neither candidate was trusted. The defining characteristic of American society today is that Americans trust neither their political institutions nor one another. We need a conscious effort to reestablish trust, by making fair play and truth-telling an explicit part of the national agenda.

American faith in government is in free fall. In the late 1950s and early 1960s, more than 70 percent of Americans believed that government could be trusted “always or most of the time,” compared with just 19 percent who said the same at the end of 2015 (figure 1).

The collapse of trust in other people is equally striking. For decades, pollsters have asked Americans whether “most people can be trusted.” For decades, the proportion answering in the negative has been rising. In the run-up to the election, only around one-third of voters regarded Donald Trump and Hillary Clinton as trustworthy.

There are four interrelated reasons for these downtrends: (1) the rise of the secretive and duplicitous US security state, which has left a deep divide between the public and the federal government; (2) the sharp widening of the inequality of wealth and power since the early 1980s; (3) the impunity of the rich regarding the rule of law; and (4) the precipitous decline of political parties as vehicles of political participation and their replacement by the mass media.

In order to restore democratic legitimacy, we must reverse all four.

The first precipitous decline in trust occurred from 1963 to 1973. It started with the assassination of President John F. Kennedy and extended through the failed Vietnam War to the Watergate scandal. For a decade the US government lied relentlessly to the public, and the public gradually came to see that official explanations hid darker truths. The machinations of the CIA in toppling governments and withholding evidence from the Warren Commission investigation of the Kennedy assassination, combined with relentless government lying about Vietnam, created a gulf between Washington and the people that has never closed. In more recent years, the perpetual shadowy wars in Iraq, Libya, and Syria, have further deepened the public’s doubts and distrust.

On top of that came the takeover of politics by the super-rich. This got underway in earnest in the 1980s, when the Reagan Administration and Congress slashed top marginal tax rates and “greed is good” became the Wall Street mantra. Since then, the inequality of income has soared to unprecedented levels. The rich have used their power assiduously to protect their growing wealth. Their tactics have included tax loopholes of countless varieties to hold their growing wealth offshore and free of taxes; privatization of public functions (schools, prisons, military operations) as sources of new profitability; monopoly power in the health care sector (the largest single sector of the economy); union busting; and encouragement of offshoring of jobs and inflows of migrant workers to keep wages low.

The public routinely asserts that the politicians do not care “about people like me” — and they are right. Top political scientists have carefully documented that only the attitudes of the richest Americans determine the policy outcomes of the political process.

The soaring inequality of wealth and income has also created an age of impunity, in which the rich and powerful escape from legal and even moral responsibility by virtue of their great wealth. We have seen everywhere the deterioration of basic moral standards among the elites of the society. The Clintons and Trumps epitomized the process, both using the political system to maximize their personal wealth while skirting all manner of ethical and civic responsibility.

The dominant ethos of the superrich has become Ayn Rand libertarianism, a kind of “great man of history” philosophy cloaked in the language of liberty. The core idea is that great men should not be constrained by the petty demands of the moochers. The moral responsibility is to be rich and powerful, not to be honest or to tend to the weak and the poor. It’s okay to cheat on counterparties, trade on insider information, pollute the air and water, sell toxic products, evade taxes, break unions, jack up drug prices, fake drug testing, or take any other measures in pursuit of profits as long as the expected gains exceed the expected costs of fines or reputational losses. And since reputation depends mainly on wealth, not on honesty, the reputational costs of misbehavior are shockingly small.

A recent psychology experiment illustrates the amoral corporate culture of the financial sector. In the experiment, the employees of an (unnamed) international bank were divided randomly into two groups, a “control” group and a “treatment” group. Both groups were given forms to fill out at the start of the experiment. The control group was asked general questions. The treatment group was asked questions about banking. Then each group was asked to flip coins and record how many “heads” they flipped, with a monetary award increasing according to the number of heads they tallied.

The control group reported that they flipped around 50 percent heads, an honest count. The treatment group claimed to have flipped around 58 percent heads, a dishonest report that significantly exaggerated the actual proportion. The conclusion: Simply by being reminded that they were bankers (through filling out a form about banking), the treatment group was induced to cheat. The psychologists concluded that the business culture of the bank fosters cheating and greed.

Of course the real crimes at stake are far more serious than exaggerating the number of heads in a series of coin flips. A decade ago, Wall Street greed and financial fraud nearly created a global depression, and yet the industry has still taken no responsibility for its actions, while persisting in all manner of price fixing, money laundering, and insider trading.

The US Supreme Court has shamelessly furthered the age of impunity by opening the floodgates of big money in politics through the deadly error of equating unregulated campaign financing with free speech, in Citizens United. In a more recent case, the Supreme Court overturned the conviction of former Virginia governor Robert McDonnell, who had been convicted for fraud and extortion for taking gifts from a businessman promoting his business to the state.

Other high-income countries, such as those in Scandinavia, have avoided these democracy-corroding trends. The reputation of government remains high in Scandinavia, the perceptions of corruption low. The US patterns of rising inequality, falling trust, and increasing money in politics are therefore not inevitable facts of the 21st century, but rather conditions that demand urgent repair.

The ability of the superrich to capture the political process has both sociological and economic underpinnings. With the decline of trade unions and the fragmentation of the working class, the traditional role of the Democratic Party from Franklin Roosevelt onward as the representative of workers has vanished. Both parties are now in the hands of Wall Street. The hedge funds and investment banks will populate the upper echelons of the Trump administration just as they would have a Clinton administration.

Moreover, the political parties are little more than fundraising machines. They ask absolutely nothing of their members other than their money and their votes. There is very little scope for public participation in political debate and deliberation between elections, and certainly none through the parties themselves.

Although there are no magic wands to restore social trust in the United States, there are important guideposts for citizens, businesses, and public officials. I suggest six key priorities.

• First, we must battle against the continuing and dangerous hold of the super-rich on the political process, and be alert to the fact that Trump will almost surely exacerbate rather than reverse the trend. The incoming administration’s plans to slash income taxes and to eliminate the estate tax would transfer huge wealth to the rich while forcing devastating cutbacks on social transfers to the poor.

• Second, we should recognize that the national security state remains the greatest barrier to true democracy. As the revelations of Edward Snowden demonstrated, the security state operates through pervasive secrecy and lying to the public in the name of national security. The secret armies of the CIA and special operations forces are engaged in wars, and violations of international law, beyond public scrutiny and without public accountability. The doubts and cynicism of the public vis-a-vis the Federal Government will not be overcome without an end to the secret wars.

• Third, we must act to overturn the Supreme Court’s absurd ruling that corporations are “people” with First Amendment rights to overwhelm the political process. Most publicly traded corporations are amoral enterprises whose business culture is to maximize profits through whatever means are at hand. One practical target should be to hold corporate boards responsible for the damages their companies impose on workers, customers, and the general public, such as when a company knowingly pollutes the environment (ExxonMobil), or commits financial fraud (Goldman Sachs), or misrepresents its products to the public (Theranos).

• Fourth, former government officials, including President Obama, should be barred from lobbying or Clinton-style moneymaking once out of office. Such behavior has grievously wounded public confidence, and perhaps more than any other single factor accounts for the electorate’s high distrust of Hillary Clinton and her narrow electoral loss.

• Fifth, we should hold government accountable for its actions by insisting on clear, quantifiable goals and timelines. The Sustainable Development Goals should be used to set clear metrics for government performance to the year 2030. Just as when JFK called on America to commit to landing a man on the moon and returning him safely to the earth “before this decade is out,” we should insist on significant, measurable progress on reducing poverty, inequality, and environmental damage by 2030, accordingly to clearly set goals and milestones.

• Sixth, we need to regenerate citizen participation through new forms of politics. One key possibility is through e-governance, using the arrival of universal broadband to implement a series of deep governance reforms. These would include: e-voting (online voting); e-drafting of legislation (a kind of Wikipedia for legislative drafting); e-deliberation by citizens through online public debates; and e-parties. Over time, with enough experience and safety valves, we could move to e-votes on key legislation and decisions on war and peace.

An e-party would interact with its members not only at election time but year round. The e-party would treat its members as responsible, engaged, and democratic citizens, through online voting on party platforms and positions, and decisions on party positions on key issues of the day, including the budget, taxes, environmental regulation, and of course war and peace.

E-governance has the potential to undo the single deepest flaw of our current politics: the vast gulf between the public and actual decision-making, which is now in the hands of elected officials who represent powerful vested interests and the superrich more than the voters. Political parties used to help ensure that elected representatives truly represented their constituents, but big money broke that bond. Now e-governance has the potential to enable a 21st-century form of direct democracy, one where we are no longer dependent on distant representatives to do our bidding. Of course for this to work, we need not only the mechanisms of direct democracy but also a citizenry that is well informed, morally engaged, and practiced again in direct political participation.

American disgust during the 2016 campaign and its aftermath is not hard to understand. It is a reaction to mass inequality, elite dishonesty, and the impunity of the rich and powerful. Unfortunately, the situation may well get worse before its gets better. Certainly the public’s anger will continue until the American political system is reoriented toward the common good rather than the accumulation of private wealth and power by America’s governing elite.

Jeffrey D. Sachs is University Professor and Director of the Center for Sustainable Development at Columbia University, and author of “The Age of Sustainable Development.”

https://www.bostonglobe.com/opinion/2016/12/04/restoring-civic-virtue-america/p0bBJhr9R0qHPOLOsDvH5K/story.html