Economics Where People Matter

By Frank E. James and Mark Datema Lipscomb

The 2008 election cycle presents progressive populists with a remarkable opportunity to put our political heritage and success to work on behalf of America. Our 19th-century political godparents never carried a national race, won few seats in Congress and were a tiny minority in most state houses, but they managed to create a tapestry of political successes — secret ballots, civil rights, economic reforms, initiative and referendum—that laid the foundation for modern representative democracy.

We face political challenges — imperial and elitist electoral policies which create social mayhem in the name of capital — that mirror the ones with which they struggled. It behooves us to utilize their experiences and knowledge in our current effort to ensure the highest possible quality of life for the greatest possible number of our citizens.

It is time to reunite around our first principles. Populist successes have always come from two distinct and entwined strands of political thought and action: First, subsuming specific legislative goals beneath a commitment to democratic oversight of every aspect of our national life, most especially our economic lives: Second, insisting that the search for the greatest good for the greatest number of citizens is inseparable from government’s sole source of legitimacy, consent of the governed.

Every successful political battle progressive populists have fought has ultimately been a process fight, a struggle over who among the governed could give consent, and under what terms and conditions: A struggle over the ballot box and at the ballot box.

The time is ripe for a return to politics rooted in soil judiciously mixed with oversight and access. Engaging specific issues like the WTO, military and cultural imperialism or global warming matters, but a common thread runs through all of these issues. In each case, powerful, minority interests focus their energies on disfranchising the electorate by removing occupational and cultural concerns of daily life from their oversight.

It is time to reframe our political discussions around the process-based question which provided the political heartbeat for our 19th-century allies. Does a given representative, law, policy, treaty or procedure work to preserve and/or enlarge our ability to exercise oversight of our individual and community affairs?

Ground zero for this effort, no surprise, remains our economic life. Currently, mainstream discourse promotes the idea that our economy is some kind of sentient being whose workings and outcomes operate according to unique genius and natural laws. In this version of reality, democratic oversight just gums up the works.

As an appeal to reason, these assertions are prima facie untenable. Less oversight by government may provide amazing benefits, but how would anyone know? Governments have been “interfering” in markets on behalf of one interest group or another since the days of the Pharaohs, and probably before that. Meaningful economic questions have never been about greater or less oversight. Meaningful economic questions concern themselves with the scope of that oversight and who is doing the overseeing.

Today, data shows conclusively that heeding the call for deregulation has decreased our ability to oversee our economic lives. The majority now has less ability to insist on accountability, fewer resources to bring to bear on the fight and less legal recourse. At the same time a tiny, disproportionately wealthy minority has utilized the rhetoric of “free-markets” to privatize their gains while dumping their risks onto a disfranchised political majority.

Politics is not the problem here, the lack of politics is. “Free-market” ideologues have cloaked greed in the rhetoric of science, in order to avoid having to publicly defend their claims to supernatural authority. Not even the staunchest of free-marketeers pretends that economic activity happens without human input. And politics, not economics, is the appropriate forum for discussions about the nature, scope and purpose of these human inputs.

Free-marketeers are not debating alternative economic pathways within the legal and cultural framework of representative democracy; they are dismantling representative democracy. They are working to replace it with a corporate feudalism, a political economy of hereditary entitlement sanctioned by market-divinities whose sovereignty is unquestionable and whose workers and workings are beyond lay comprehension. And, like all feudal enterprises, the essential characteristic of corporate feudalism is its unswerving commitment to capital accumulation by the few at the expense of the many.

Corporate feudalism is no more or less a human invention than any other form of political economy. America’s modern corporations are political creatures. They crawled out of the political ooze a mere 122 years ago (1886: Santa Clara County v. Southern Pacific Railroad), and they have grown powerful because of concerted political and judicial efforts to cloak them in the privileges of citizenship, while insisting on their right to manage our economic lives without political (democratic) interference in accordance with the “divine” laws of the “free-market.”

The countdown to Nov. 4 is an opportunity to reassert the right to oversee our economic lives, and to take up the challenges which inhere to managing them. The judicial decision of 1886 was a political decision, and the problems that confront us now are political not ideological. They are not problems of “right thinking” or “free markets,” they are problems of the ballot box: How to remind the body politic that we create economic reality, so that we can work as a community on setting economic priorities that should guide our lives.

The best way begin this process is to question the assumption that price can capture cost and value at the point of transaction in any truly meaningful social/political sense. This economic hypothesis has many uses, but the problems and questions it leaves unanswered are the very ones that most plague us today. Like Newton’s theory of gravity, as time passed and experiences accrued, its inherent limitations rendered it increasingly inadequate as a way to address serious economic questions that confront us.

We will not manage our economy in a way that has any hope of creating the greatest possible good for the greatest number of citizens until we invert price-cost-value economic models and replace them with a more realistic, democratic and demanding calculus:

Price (does not equal) Cost (does not equal) Value.

Environmental issues present a particularly useful lens through which to view the benefits that inhere to using this economic calculus. The degree to which every issue of resource extraction, utilization or allocation polarizes communities at all levels of our society hardly needs mentioning.

But casting environmental debate in terms of this new economic model, that price — the amount paid for, say, asbestos, on the commodities markets — did not remotely recover the long term health costs to those exposed during its mining, milling or installation—helps us engage economic issues in way that recognizes the value of people as well as profits.

The point and strength of this more democratic calculus is that it calls attention to the fact that the electorate, as a stake-holder in the economic process, has civil and economic rights every bit as valid and as pertinent as those of corporate shareholders.

In fact, as with the bedrock principle of Western Water Law—first in time first in right, the rights of the electorate, which everywhere formed the soil out of which the rights of capital grew, being first in time, must trump those of secondary political institutions such as corporations.

Even more importantly, so that the point is not lost, whatever the price, whatever the costs, inclusiveness itself provides the true value of this economic inversion. It frees us from zero-sum economic equations and allows us to create economic opportunities and benefits within the framework of our political, cultural and economic traditions.

This model also provides fruitful ways to disentangle knots of special interests and competing rhetorical tropes that dominate discussions about our food production and distribution systems. Ethanol, organics, captive supplies, CAFOs, all absorb an enormous amount of political energy. Understandably. These issues touch matters with grave implications for all of us. But the political pervasiveness of ideological fission preserves and promotes status quo inequities, at the same time it decreases our ability to assess true costs and relative values for a given issue. This new, political and economic calculus suggests what a more unified field approach might yield.

Take, for example, the ebb and flow of discussions about “organic” versus “conventional” farming practices. Recognizing that price does not equal cost or value provides a way to open up meaningful discussions about the complete food system.

As numerous commentators have noted, overall environmental costs associated with bringing organic produce great distances to market may be greater than the environmental costs associated with conventional farming practices in a limited area. That said, there are obviously significant benefits for a community growing organic crops, such as a less toxic praxis. And additional benefits, such as celebration and interaction, which cannot easily be measured well through simple price point calculations also come to communities from food produced locally.

The worth of affordable nutrition for the greater political community is certainly worth bearing in mind. But price cannot begin to address these concerns. In fact, more often than not, focusing on price prevents us from getting any where near them. After all, price is no more a constant than any other aspect of an economic transaction, and it too should reflect costs and values pertinent to the full range of the stakeholders in the body politic.

This then, is in a sense, the end game, and astute readers will have already tumbled to the process issue that directly addresses it: The size of the body politic. For all his genius, in “Federalist X” Madison had it exactly wrong. And we, as he, would have done well to have heeded Cicero. Size most assuredly matters.

As the Greeks and Romans surmised, no meaningful political consensus can exist across a body politic whose borders and allegiances embrace too many divergent cultural and economic interests. Expansion is the path of empire, not democracy. Therefore, political economies which rest upon the assumption that only democratic participation and oversight can effectively assess relationships among price, cost and value cannot hope to emerge, much less survive unless the body politic is small enough to frame these issues in terms of common wealth. Just as the first step toward political success for progressive populists lies in uniting around the principles of democratic oversight, the path toward political unity lies in refashioning the body politic into smaller electoral entities, so that the constituencies represent a more integrated—culturally, economically, environmentally and legally—community of voices and visions.

It is time to eschew labels—Democrat, Republican, Green, Socialist—and put our political energy behind a teaching strategy built around the recognition that Price (does not equal) Cost (does not equal) Value. The 2008 elections offer a remarkable opportunity to provide the body politic with a view of our economic, cultural and political lives through a fundamentally democratic lens. Citizens thus empowered can then reassert their right to democratic oversight of their daily lives by addressing the size of their communities, rather than the size of their government.

Frank E. James is director of Dakota Rural Action ( and Mark Datema Lipscomb is a teacher in Chicago Public Schools (

From The Progressive Populist, Sept. 1, 2008

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