People have multiple economic identities: worker, consumer, shareholder, citizen, taxpayer, and beneficiary. That seems obvious when you look at, but how people think about the relationship between these six identities is core to their political economy beliefs because it guides their answers to the questions of ‘what is economic policy for?’ and ‘who is economic policy for?”. There are four main ideological styles in U.S. politics and a fifth group (retirees) that are large enough and politically powerful enough that they merit consideration as a category unto themselves. Each of these five styles prioritizes those six economic identities differently and these differences help explain a lot of their political economy worldviews. There’s a little bit of reductiveness here, as there always is when creating conceptual categories but this is, I think, a widely underappreciated way to make sense of political economy disputes.
The Socialist/Populist Left
The socialist/populist left tends to see workers as supreme. The worker takes up more space in their political economy thinking and rhetoric than any of the other five. The worker, collectively organized and thought of in social class terms, is the hero and main protagonist in society. From their perspective, the central economic problem is that capital exploits labor, robbing it of the value that it alone created, and so wages are both insufficiently equal and too low. Thus, two of the main things that government exists to do are to promote worker power relative to capital and to redistribute economic resources that markets, in their eyes, excessively concentrate.
The citizen runs a comfortable second. The socialist/populist left likes citizens because they like the idea of political supremacy over markets. They’re committed to the idea that all market activity is and ought to be guided by political authority. They think of this as “economic democracy.” In some areas, their case is sound to the point of being obvious. We, as a political community, agree that child labor below 15 should be banned so we have laws prohibiting that kind of market exchange. The problem is that they then want to apply that logic to everything. In this view, if a developer wants to build some housing and homebuyers want to purchase those homes as part of a market exchange, that exchange is only acceptable if some local political power (often comprised of activists) gives it the green light and they only want to give it that green light if they can extract concessions that advance their political agenda. Deregulation freezes out those activists and advances other first principles like economic liberty, growth, and limited government ahead of political supremacy (or what they would call economic democracy). They can’t have that because they are philosophically committed to activists citizens having as much veto power over commercial activity as possible.
Their image of a good society is thus communitarian and regulation-friendly. For them, commercial activity is good if and only if it achieves goals that the political community (led by them it goes without saying) has decided is in the common good; buyers’ and sellers’ interests are secondary to what the “community” says is best. The idea that we want economic activity to exist in a separate private sphere largely cordoned off from politics is anathema to this style of thinking. It thus sees little value in limited government, natural rights, or the private sphere since everything is in some sense social, political, positivist, and part of the public sphere.
The government beneficiary comes third but is still well liked by them because the beneficiary is associated with solidarity, protecting the vulnerable, and an active government. Note that, for the socialist left, all three of these top identity priorities are conceived in group terms. Workers are not merely individuals selling their labor in the labor market but are instead a relatively cohesive group with more or less unified interests. Citizens and beneficiaries are not understood as individuals first and foremost but as members of social collectives.
The socialist/populist left is indifferent (at best) to consumers and taxpayers. In the socialist/populist left cosmology, the consumer is often missing. When they are thought of at all, it usually in relation to one of the other five. When the consumer’s interest can be used as a cudgel against shareholders, they get wielded. When consumers’ interest run counter to others’ interests, especially workers, it is the consumer who is expected to give way. If, for example, workers want to be protected from foreign competition and that means the consumer must pay more for the foreign product or even do without it altogether, well, that’s too bad for the consumer who is also expected to have no complaint about this outcome. The degrowth extreme of the populist/socialist left even actively wants consumers to have less as a way fight collective challenges like climate change. A world that is poorer but more equal and more solidaristic is a better world in this style of thinking; helping consumers doesn’t really have a place in that.
Taxpayers are understood to be corporations and the rich and so are viewed with relatively little sympathy. When and where inequality exists, one of the go-to answers is to taxes rich people and corporations more to pay for whatever new program has been devised to address this inequality. Likewise, shareholders are thought as exploiting labor and so are viewed with considerable antipathy. Because they view shareholders this way, they are eager to blame big business management (who act on shareholders’ behalf) for seemingly any economic ill. If prices go, it is because corporations are being greedy. If prices go down, it is because they are predatory pricing. For the populist left, the most effective and most emotionally satisfying path to a better economy is through squeezing every concession possible from capitalist shareholders and so they want to make every commercial activity a hostage negotiation where they threaten to hold up whatever commercial activity the shareholder wants to do until the business in question has been shaken down for whatever concession can be gotten. Again, this is easiest to see with housing. Rather than simply letting the developer build what they believe homebuyers want, the socialist left wants to put all kinds of regulatory demands on the developer.
In the populist left’s thinking, growth that happens but that does not contribute to society being more equal and more solidaristic is growth that isn’t necessarily worth having. All of this works in concert with and supports the populist left’s desire to optimize for equality, worker power, greater constraints on capitalist shareholders, and more active government.
Socialist/Populist left ranking: 1) worker, 2) citizen, 3) beneficiary, 4) consumer, 5) taxpayer, 6) shareholder
Center-Left Neoliberals and Some Libertarians
Market-friendly progressives, or as I’ve termed them here, center-left neoliberals, as well as some libertarians, see things differently. They put the consumer first. Buying a home, paying for childcare or college tuition, and purchasing medicine are just a few examples of ways in which being a consumer is important to a person flourishing. Putting the consumer first, in their minds, helps the widest range of people since essentially everyone is a consumer in some regard. It facilitates individualism because you can buy what you want while I buy what I want. It promotes innovation and drives material abundance since businesses have incentives to win consumers’ dollars. That focus on consumers also leads this group to do a lot more supply-side thinking and to take inflation more seriously than the populist left. Finally, it leads to have a much more easygoing attitude toward social class. Caring about consumers helps the poor and the working class since they have the least margin in their budget, but it also means looking out for middle class and professional class interests too since they are consumers as well. It is more positive-sum and less power-focused than either the populist left or populist right.
As long as their interests aren’t in conflict with consumers’ interest, and contra to what the socialist left claims about them, the neoliberal center-left also likes workers, though they think about workers very differently than the populist left. They don’t hate unions per se, but they are more interested in raising median inflation-adjusted wages than a big structural revision of the economy. For them, workers are individuals in a labor market and so what they want is a hot labor market that allows workers, as individuals, to thrive.
For neoliberals, shareholders come third. In contrast to the populist left, neoliberals see capital and labor as in a primarily complementary rather than primarily conflictual relationship. The developer and the construction workers both profit from building homes for example. This is where much of the mutual frustration and anger over worker politics between neoliberals and socialists comes from. To the socialist, the neoliberal’s friendly view of capitalist shareholders is at best hopelessly naïve and more likely is a betrayal of workers on behalf of the already powerful. To the socialist, you cannot be on the side of management and labor. You have to pick a side and refusing to pick a side is in fact a choice to side with management. To the neoliberal, the socialist style is excessively zero-sum, growth-indifferent, off-puttingly collectivist, and weirdly power obsessed. Notice also that the three economic identities that neoliberals put at the top are the three that are not directly tied to government. That is necessarily going to lead to less state-driven economic thinking. That too puts them in contrast to the socialist style.
For neoliberals, taxpayers come fourth. Center-left neoliberals are not tax enthusiasts in the way that socialists are but nor are they tax haters in the way that some right-libertarians are. Beneficiaries come fifth. Because neoliberals see functioning markets as the way to promote abundance, government benefits are essentially a backup option, necessary but not the primary mechanism for creating prosperity.
The one group that neoliberals and more moderate libertarians view with deep suspicion is the citizen. By citizen, I mean “one who participates in collective political decision making that affects the market.” They are suspicious because “community” is often used to justify all kinds of violations of individual’s economic liberties. The citizen is the NIMBY responsible for the housing shortage, the environmental activist fighting wind turbines, and the busybody asking the kid with the lemonade stand if she has a permit. Citizen primacy often runs directly against consumer choice, workers as individuals, and capital mobility. Strong norms around private property, capitalism, and limited government are good checks against that citizen supremacy. This relative prioritization of the six identities works in concert with and supports their desire to optimize for increasing the inflation-adjusted median wage, for material abundance, and for personal freedom.
Neoliberal/centrist libertarians’ ranking: 1) consumer, 2) worker, 3) shareholder, 4) taxpayer, 5) beneficiary, 6) citizen
Paul Ryan Conservatives
Though Donald Trump and Trumpism have now fully taken over the Republican Party, there remains a sizable swath of voters who are center-right, who were more comfortable with Reagan than Trump, and who see things differently than the populist right. They have, at least for the moment, lost a lot of power within Republican Party but they still exist in broader society, so let’s call them Paul Ryan conservatives. They prioritize shareholders first. For them, the entrepreneurial owners of capital are job creators and the engine of prosperity. This is part of what drives so much hostility between Paul Ryan conservatives and the socialist left; they have very different ideas of who is doing the value creation in society. The socialists think workers are creating all the value and the shareholders are absconding with much of the value even they didn’t really do anything. The Paul Ryan conservatives think the capitalist shareholders did the value creation and that workers should be thanking the management for their jobs, which is in turn galling to the socialists.
The Paul Ryan conservatives also prioritize taxpayers quite highly. If you earned that money in your paycheck and you earned that wealth in your stock portfolio and your work is also what created broader societal prosperity, taxes are an imposition that should be kept as low as feasible. Their third-place group is consumers. Defending the consumer is part of defending the centrality of markets in society.
Their relationship with workers is ambivalent in much the same way as the relationships between the populist left and consumers and neoliberals and taxpayers respectively. As with center-left neoliberals, beneficiaries come fifth and the citizen economic identity is viewed with suspicion. Notice how much Paul Ryan conservatives’ relative prioritization puts them in alignment with center-left neoliberals but makes them almost diametrically opposed to the socialist/populist left. Like neoliberals, they are optimizing for increasing the inflation-adjusted median wage, for material abundance, and for personal freedom. The major fault line between these people on the center-right and center-left is not what to optimize for, it is how to achieve those goals. That shared optimization, as much as any particular policy, is what right-wing populists and left-wing populists so sharply disagree with about the Carter to Obama period.
Paul Ryan conservatives’ ranking: 1) shareholder, 2) taxpayer, 3) consumer, 4) worker, 5) beneficiary, 6) citizen
Nationalist/Populist Right
The nationalist/populist right sees the national citizen as supreme. For them, the economy isn’t really about individual flourishing but rather a competition for resources between an ‘us’ and a ‘them’ and so, like the socialist left, they believe in political supremacy over markets. In this view, markets need to be harnessed, and in particular need to be geographically bounded, to benefit the “us.” Much as the socialist views economics as inescapably political, the nationalist views economics as inescapably cultural. Nationalists have very specific ideas about who is deserving and who isn’t. A one-income household where a high-school educated man works in a traditionally blue-collar profession while the woman is a stay-at-home mom, where they have several children, go to church, and are locally rooted in an small town or rural area is the essence of what they understand peak citizenship to be. To nationalists, government is there to drive resources toward these kinds of people. The less that scenario describes you and your family though, the less today’s nationalists see you as deserving. You aren’t fully part of the in-group. Because nationalists optimize for particular cultural outcomes and particular status arrangements, for them, economic growth that happens but that does not benefit the right people is growth that isn’t necessarily worth having.
Their second priority is the taxpayer because, in the right-wing populist world view, taxes are government takings from the common man that pay for services for “others”. Third is the beneficiary. Because government benefits can be directed only to those who the political system deems sufficiently full in their citizenship, that naturally plays into nationalist thinking around deservingness and zero-sum resource fights. Because their top three priorities are the three economic identities most closely linked to government, it is actually the nationalist who, more than even the socialist, is rabidly concerned with who holds political power. Relatedly, to the nationalist, probably even more than the socialist, politics is about power and conflict.
Their fourth priority is workers who fit their idea of who the authentic national citizen is. There’s a sizeable sympathy gap here between fourth place workers and fifth place shareholders. In stark contrast to the Paul Ryan conservatives, the populist right views shareholders with anger and contempt. In nationalist thought, the owners of capital should deploy that capital not to maximize return to themselves without regard to location but rather within the nation so as to benefit those authentic members of the nation. To the nationalist, the capital owner investing anything abroad rather than in the domestic hinterland is engaging in a certain kind economic betrayal. They view this kind of capital owner as a contemptible traitor in much the same way that the socialist views the picket crosser.
The consumer, the economic identity that is in practice the most broad-minded, comes last in nationalist thought. Nationalists know full well that Walmart shoppers are putting their individual budgets first with little to no regard for where the items in their shopping cart were made. The nationalist, if they can get their way, would like to force consumers to purchase from those whom the nationalists want to direct resources toward. This de-prioritization of consumers is why people on the nationalist right like Robert Lighthizer love tariffs and trade protection so much. The biggest winners from globalization are consumers and they simply don’t care about consumers. They genuinely believe that a world in which consumers get worse deals but their money goes to people whom the nationalists deem to be deserving members of the in-group is a better world. In this way, the populist right’s collectivism mirrors that of the socialist left.
This relative prioritization of the six identities works in concert with and supports their desire to optimize for particular cultural power outcomes. For the nationalist right, like the socialist left, economics is fundamentally about power, not about wealth creation or individual self-actualization. Much as the Paul Ryan conservative is almost diametrically opposed to the socialist left, the nationalist right is almost diametrically opposed to the neoliberal.
Populist/nationalist right ranking: 1) citizen, 2) taxpayer, 3) beneficiary, 4) worker, 5) shareholder, 6) consumer
Retirees
Though they are not an ideological group, retirees as a group are large enough and politically active enough that they exert a gravitational pull all their own. No ideological faction is politically viable without at least some support from retirees. Those retirees are all beneficiaries via Social Security and Medicare. Maintaining those programs is the top priority of those retirees. They are the only group for whom the beneficiary is the supreme identity and so their preferences bend the shape of government benefits toward the kinds of programs that benefit them, pensions and health care. Indeed, retirees may even view expansions of benefits to non-senior groups as competing with benefits to themselves. Retirees rely on their retirement savings as much as they do Social Security and those savings are usually tied into the stock market, which means that they are quite sensitive to shareholder interests. Retirees, especially those who are recently retirees, are some of the most political active people. They have time on their hands and still have the energy to participate heavily in politics. So for retirees, citizens come in third place. Retirees still pay some taxes such as property and sales taxes but because they are no longer working, they do not pay the income and payroll taxes that are the workhorse taxes of the federal government. This may help explain why they have an ambivalent relationship with taxpayers. Consumers come fifth for them. Retirees typically consume less overall and consume a more limited range of goods and services and they get cost-of-living adjustments in their Social Security so when prices go up, their benefits do too. Finally, by definition retirees are no longer working and so, in general retirees prioritize workers interests’ least. They are also the group that least benefits from economic growth and so are the most growth-indifferent. That also puts them at odds with workers who need economic growth if they are to have stable jobs and good wages.
Retirees’ ranking: 1) beneficiary, 2) shareholder, 3) citizen, 4) taxpayer, 5) consumer, 6) worker
Relative Prioritizations
A couple of things worth noticing here are that, except for taxpayer, all of the other economic identities are the top priority for at least one of the political factions, but taxpayers are not any group’s least liked identity either. Additionally, the totals on the right are fairly close to each other, which suggests why none of these economic identities consistently wins or consistently loses against the others. Finally, where this table gets even more helpful is to realize that, where the prioritizations line up, you can see political cooperation even where you might not expect it and, where there are big priority differences, you can get big political disagreements even within parties. Below, I’ve marked close priority agreement with green arrows and large priority disagreements with red arrows.
All kinds of explanatory stories pop out of this. Why is it that the populist left, even though they think housing is a human right, does not get onboard with the pro-housing Yes-In-My-Backyard (YIMBY) movement that has become one of the core causes of contemporary neoliberalism? Well, it is because homebuyers and renters are consumers which socialists don’t prioritize and, at the same time, socialists associate developers with capital shareholders, the deregulation that YIMBY preaches runs against the citizen primacy of tight zoning and, that new housing largely isn’t going to be social housing that will go to beneficiaries. When asked to pick between consumers/shareholders on the one hand (two of their three lowest priority identities) and citizen/beneficiaries on the other (two of their top three priorities), it becomes more clear why the populist left rejects the logic of housing abundance. To the neoliberal YIMBY on the other hand, construction workers and developers work together to provide new housing, which increases supply and is good for consumers, and the villain in the story is the pain-in-the-behind citizen NIMBY that wants to block new housing.
Why did center-left neoliberals and center-right Paul Ryan conservatives form such a dominant orthodoxy around limited government for so long? Well, it’s because they both deprioritize citizen supremacy in the economy. They are valuing the liberal in democracy as much as the democracy. Where do neoliberals and Paul Ryan conservatives most disagree? On whom really needs to be defeated the most. Neoliberals want to box out the nationalist right whereas Paul Ryan conservatives most want to box out the socialist left. Why? Because that is where the relative economic prioritizations are at their most antagonistic. Where do left populists like Matt Stoller and right populists like Josh Hawley most see eye-to-eye? Overturning that centrist consensus and promoting citizen supremacy. Where were populists and Paul Ryan conservatives able to best cooperate in the Trump administration? Taxes. See the TCJA. Where does the nationalist right run into a wall of opposition from Paul Ryan conservatives? Taking a hammer to shareholder interests. Note how the USMCA amounted to minor tweaks of NAFTA rather a wholesale destruction of it. Where do Paul Ryan conservatives hit strident opposition from nationalists? Immigration as that violates nationalists’ narrow, in-group/out-group understanding of citizenship. In what policy area do retirees get along with socialist Bernie bros? Protecting beneficiary interests.
These relative prioritizations give some hints as the where neoliberals can make common cause with other ideological styles. We can work with socialists on active labor market policies. Though the two groups have somewhat different ideas about how to help workers, both want workers to do well. The two groups can work together on some issues related to beneficiary interests. There is no reason why socialists and neoliberals should have any disagreement on universal free school meals or a bigger social safety net for children for example. Beyond optimizing for economic growth and inflation-adjusted median wage gains, where else can neoliberals find common cause with Paul Ryan conservatives? Defending capitalism and the consumer welfare standard and perhaps also getting something done on entitlement reform. Where can neoliberals find common cause with retirees? Pro-consumer health care reforms like over-the-counter hearing aids.
Finally, on what grounds can we drive wedges between the nationalist right and other groups so as to block the rise of the nationalist right? The first is consumers and the Paul Ryan Republicans. The message to Paul Ryan conservatives in the suburbs needs to be that the nationalist right wants to make you poorer so that they can advance their pet ideological agenda. Do you like inflation? Nationalists want to make it worse. The second is with retirees and shareholders. To retirees, we should point out that the businesses that nationalists want to hammer are the businesses in their 401k. Do you want a more or less comfortable retirement? Nationalists want to make it less comfortable. To the socialists, we should point out that nationalists do not in fact share socialists’ understanding of solidarity. In fact it’s just the opposite. Nationalists’ maniacal focus on in-groups and out-groups means that they will never support the kind of broad-based welfare state that socialists want. As we try to work with these other three groups to hold back the populist nationalist right, we should keep in mind how the socialist left, Paul Ryan conservatives, and retirees think about economic identity, and what and who they think economic policy is for.
-GW