Professor Warns: America’s “Grand Bargain Is Coming Undone” — As Conservatives Push For New Gilded Age

Harvard professor of history, Alexander Keyssar, writes in the Washington Post, “The real grand bargain, coming undone,” that the agenda of today’s conservatives “looks like a bizarre effort to return to the Gilded Age, an era with little regulation of business, no social insurance and no legal protections for workers.”

He says the conservative agenda are calls for the “destruction or weakening of institutions without acknowledging (or perhaps understanding) why they came into being.”

Keyssar says that this agenda forgets that over 100 years ago, in response to the excess of the Gilded Age, America made a grand bargain  — “a balance between private interests and public welfare, workers and employers, the wealthy and the poor” — and that conservatives efforts to destroy this grand bargain is a big mistake.

A century ago, Keyssar explains,“most, Americans were convinced that capitalism had to be replaced with some form of cooperative commonwealth … In the presidential election of 1912, 75 percent of the vote went to candidates who called themselves ‘progressive’ or ‘socialist.’ … The political pressure from anti-capitalists, anti-monopolists, populists, progressives, working-class activists and socialists led, over time, to a truly grand bargain.”

1. First came the regulation of business and banking to protect consumers, limit the power of individual corporations and prevent anti-competitive practices. The principle underlying measures such as the Sherman Antitrust Act (1890), the Pure Food and Drug Act (1906) and the Glass-Steagall Act (1933) — which insured bank deposits and separated investment from commercial banking — was that government was responsible for protecting society against the shortcomings of a market economy. The profit motive could not always be counted on to serve the public’s welfare.
2. The second prong of reform was guaranteeing workers’ right to form unions and engage in collective bargaining. The core premise of the 1914 Clayton Act and the National Labor Relations Act of 1935 — born of decades of experience — was that individual workers lacked the power to protect their interests when dealing with large employers. For the most poorly paid, the federal government mandated a minimum wage and maximum hours.
3. The third ingredient was social insurance. Unemployment insurance (1935), Social Security (1935), and, later, Medicaid and Medicare (1965) were grounded in the recognition that citizens could not always be self-sufficient and that it was the role of government to aid those unable to fend for themselves.

Keyssar says that this “grand bargain” is coming undone

• Regulatory laws (including antitrust laws) are weakly enforced or vitiated
• Private-sector employers’ fierce attacks on unions since the 1970s
• The social safety net has frayed … The real value of the minimum wage is lower than it was in the 1970s.