Today in her first campaign speech for the 2016 presidential campaign, Hillary Clinton used the word “bargain” in a very deliberate context. Hillary knows the decades of scholarship using the term “bargain” to describe the ideological compromise of the New Deal; the location of her speech is no cheap campaign prop.
New America Foundation president and CEO Anne-Marie Slaughter, whose appointment to the Obama administration Hillary herself announced, in 1993 used the ideological bargain terminology to describe the 1944 Bretton Woods System, a Roosevelt project, governing post war international monetary policy and trade.
According to Slaughter and most other eminent scholars, BWS was a complicated ideological compromise at the global level between American New Deal dynamics and free market, “light touch”, laissez faire neoliberal capitalism. Nation state priorities expressed politically, such as social welfare and full employment, would co-exist with the interests of money. Specifically, with the interests of capitalism. BWS created rules, norms, and regimes designed to maximize the benefits of both capital and the state, and minimize the risk that neither state nor capital would repeat their worst known potential – war and collapse.
Hillary knows the New Deal was way more than an alphabet soup in a grainy newsreel, and BWS is arguably its crowning jewel. The BWS monetary order is credited by the same scholarship with creating what Americans uniformly imagine as its nostalgic nirvana – the post war baby boom years, 1945 until the early 1960′s.
The Pax Americana. The white picket fences. Opie. ’57 Chevys. Drive-in movies. Elvis.
You know, Happy Days.
The BWS monetary order created these trade debates based on voluntary participation by nations. BWS gave birth to GATT, which begat the WTO, set in motion the processes that led to NAFTA and PNTR. But Roosevelt’s intent for BWS was to place far more enforcement emphasis on capital controls than on liberalization of trade. Trade negotiations internationally were to be voluntary, based in liberalization and free markets. But capital controls were assumed. Limiting the ability of monetary movements across international borders was a primary lesson of the Greta Depression pre-war years.
That capital control bit is now gone. Nothing controls the movement of capital across international borders. A new compromise between state and capital is long overdue. Yet the zombie undead of trade agreements based on nothing but neoliberal ideological Adam Smith pure capitalist dogma march on. We see the results, which is why Hillary is being pushed leftward.
Hillary’s income inequality references today though seem like window dressing – she certainly understands what’s happening. Knows its theoretical source. Knows the history. Knows what happens when capitalism in its purest form is unleashed at the international level, with no regulation, no taxing powers, no limits on speed of light transfers of titanic amounts. Friday, that march was halted in the U.S., by Congress, incredibly, this Congress, for the first time since, arguably, the BWS compromise in 1944.
Voters are done with the con job of trade agreements. Left and right. White and black. Old, young, Tea Party, Occupy.
Have been since at least 2002, when Ohio Congressman Tom Sawyer was defeated by insurgent primary challenger Tim Ryan based almost solely on Sawyer’s votes for GATT, PNTR, and NAFTA. That long promised lifting tide raising all boats? Voters see the results on their kitchen table.
No tide. No lifting boats. It’s a con. We bought it. We took it for a spin. This thing is a lemon. Woe unto those who try to sell us another one.
Hillary knows there are very deep, ideological and historical reasons for all this. She knows very well how important that TAA vote was on Friday. Without any meaningful control on capitalism, trade agreements based solely in the goal of freeing the Invisible Hand ever further, will merely suck wages ever downward, and income ever upward. All Hillary has to do is ask Mrs. Slaughter.
This is why Hillary’s silence on Friday’s TAA vote in Congress in her first campaign speech is so striking. Hillary surely knows this fight isn’t over, and never really is. The “bargain” Hillary refers to has long been in shreds. I assume Hillary also knows that an incumbent can lose to an unlikely challenger based on nothing else but trade.
I expect she’ll chime in soon.
 Burley, Anne-Marie, Regulating the World; Multilateralism, International Law, and the Projection of the New Deal Regulatory State, ed. Ruggie, J., Multilateralism Matters, Columbia University Press, 1993, p. 129.