Is It Going to Be I or We?

When we try to understand the present outside any historical perspective it is easy to grow either too complacent or too pessimistic.  Either way we fall victims of inertia believing that life will continue as is because that “is” appears to be a self-explanatory possibility.  Several recent posts on this blog have described what is a general view, that is, we are living in an era of individualism and personal gratification, flailing social cohesion and party tribalism.

But there comes a historical account of the last 125 years of American history that shows how American society has oscillated between individualism and social solidarity and most importantly what has driven each of them.  This book is The Upswing of Robert Putnam, a Harvard public policy professor.   What follows is a partial outline of this historical record.

In a nutshell, Putnam finds that starting at the turn of the twentieth century the Progressive Era movement set in motion a series of economic, institutional and social changes that moved America from the politics of economic inequality and polarization of the Gilded Age (1870s – 1890s) toward a long period infused with egalitarian policies, civic responsibility and a stronger sense of “We.”  These trends were about to last until the 1960s – 1970s before taking a turn and gradually descending toward individualism with its resultant economic and social inequities.  The path of these developments is along an inverted U curve (Ո) that starts with a society favoring the I, ascends to a state favoring the We and then reverts back to our present state of I.

Start with the economic curves.  The notorious top 1 percent hogged 20% of national income in 1910, but only 6% in 1975, and up to 21% by 2013.  The same with wealth: 42% in 1910, down to 23% in 1980, and back up to 41% by 2013.  Corporate tax: 1% in 1909, 53% in 1968, and down to 21% today thanks to the 2017 tax law.  Progressivity of federal tax rates (i.e., the difference between highest and lowest marginal tax rate): 25% in 1913, up to 70% between 1940 and late 1950s, and down again to 27% in 2017.  Top estate tax: 5.5% in 1915, up to 75% in 1940-1975, and down to 40% today.  Also relevant here is the tax exclusion for estates which kept falling till 1977 and then gradually rose to its highest point after 2017.  (A higher exclusion rate means less of an estate is subject to tax.)  

I am throwing this bunch of numbers, annoying as that may be, to convey an irrefutable fact:  How out of step with recent past experience we are today when we decry higher taxes as confiscatory ignoring the fact that past generations of Americans had a wholly different sense as to what is a fair distribution of the tax burden.

How were these more egalitarian and socially-centric results accomplished in the first three quarters of the 20^th century?  First, by a spade of reforms and initiatives, including anti-trust laws, financial regulation with the establishment of the Federal Reserve System, the introduction of personal income taxes, and the growth of labor unions.  Interestingly, the reforms and the spirit of the Progressive Era survived through Republican and Democratic administrations until Roosevelt’s New Deal added to that legacy with Social Security, national labor laws, further regulatory reforms, and housing policies.  The arch of social mindedness continued to rise through the Eisenhower, Kennedy and Nixon administrations.  Its high point was the Great Society programs enacted during the Johnson presidency.

The progression of America toward a sense of “we are in this together” was not just the product of government activism.  It coincided with a strong engagement of citizens in secular and religious projects of social solidarity that expanded voting rights to women, established mutual-support organizations and cooperatives (chief among them the credit unions), all of which aimed at providing solutions from the ground up.  Civic engagement thrived among long-time Americans and new immigrants; among white and black communities.  But as with the economic indicators, the civic movement, church membership and attendance, and the labor union movement reached their apogee in the 1960s and started to wither in the ensuing decades. 

As social attitudes changed from I to We, the political tribalism of the Gilded Era also started to surrender to greater political comity, cross-party collaboration and political speech that aimed to unify than divide.  But around 1970-1980 all that started to sink toward tribalism.  For example, splitting the ticket between candidates of different parties, approval ratings of a president from one’s opposite party, and inter-party feelings by citizens started to decline after 1970-1980 whereas party loyalty started to rise.  Along with these negative trends came a significant decline of the public trust in government, epitomized by President Reagan’s declaration the government is the problem not the solution. 

The period from the Progressive Era of early 19^th century to Lyndon Johnson’s Great Society has come to be known as the Great Convergence.  This is the period during which broad segments of the American public and the political parties, notwithstanding disagreements about the means, came to accept that civic initiatives and government policies were indispensable for the purpose of generating wider opportunities, more fairly shared results, and the advancement of the overall well-being of the society.

Then from the 1970s and onward, America started to experience what they call the Great Divergence.  The split between the fortunes of rich and poor, educated and less educated, executives and the rank-and-file, Democrats and Republicans, blue and red states, and so on.  Generations that came of age after 1960 started to lose their sense of social trust (“most people can be trusted”) and became less emerged in the culture of engaged citizenship.  Furthermore, public policy became less sensitive to the needs of disadvantaged citizens and, thus, social ills and economic inequities were left to fester.

That’s where we find ourselves now.  So, the question is: Are we going to continue down the road of caring first and foremost for the I?  Or are we going to be inspired by the lessons and achievements of past generations and move toward caring for the We?