A must-read at Harpers, an exclusive excerpt from Thomas Frank’s new book, Listen, Liberal: What Ever Happened to the Party of the People?:
The day after International Women’s Day in March 2015, I attended a Clinton Foundation production put on by its No Ceilings initiative at the Best Buy Theater in New York City. It wasn’t a campaign event—the 2016 race had not really started at that point—nor was it a panel discussion, as there were no disagreements among the participants or questions from the audience. Instead, it was a choreographed presentation of various findings having to do with women’s standing in the world. But if you paid attention, the event provided a way to understand Hillary Clinton’s real views on the great social question before the nation—the problem of income inequality.
Frank, who famously asked in What’s the Matter With Kansas why working class Americans vote for Republicans against their own economic self-interest, is now turning his critical lens on the Democratic Party, with Hillary Clinton as both one of the founders of the New Democrat movement as well as 2016 heir apparent. And it ain’t pretty:
But the real star of this show was the Creative Innovator, the figure who crops up whenever the liberal class gets together to talk about spreading the prosperity around more fairly. In this case, the innovations being hailed seemed mainly to be transpiring in the Third World. “Every year, millions and millions of women everywhere are empowering themselves and their communities by finding unique, dynamic, and productive ways to enter the workforce, start their own businesses, and contribute to their economies and their countries,” said Chelsea Clinton, introducing an “inspiring innovator and chocolatier” from Trinidad.
Melinda Gates followed up the chocolatier’s presentation by heaping even more praise: “She is an amazing businesswoman, you can see why we all find her so inspiring.” Then, a little later on: “Entrepreneurship is really vital for women…. It’s also their ability to advance into leadership roles into corporations. And corporations play such a big role in the global economy.”
Roughly speaking, there were two groups present at this distinctly First World gathering. Many of the people making presentations came from Third World countries—a midwife from Haiti, a student from Afghanistan, the chocolate maker from Trinidad, a former child bride from India, an environmental activist from Kenya—while the women anchoring this swirling praise fest were former secretary of state Hillary Clinton and the wealthy foundation executive Melinda Gates.
What this lineup suggested is that there is a kind of naturally occurring solidarity between the millions of women at the bottom of the world’s pyramid and the tiny handful of women at its very top. The hardship those Third World women have endured and the entrepreneurial efforts they have undertaken are powerful symbols of the struggle of American professional women to become CEOs of Fortune 500 companies (one of the ambitions that was discussed in detail) or of a woman to be elected president, which was the unspoken theme of the entire event.
What the spectacle had to offer ordinary working American women was another story.
Worth noting America Ferrera, of recent “english only!” scandal fame, was at this March 2015 “pre-candidacy” Clinton Foundation event.
Regardless of who leads it, professional-class liberalism seems to be forever traveling on a quest for some place of greater righteousness. It is always engaged in a search for some subject of overwhelming, noncontroversial goodness with which it can identify itself, and under whose umbrella of virtue it can put across its self-interested class program.
There have been many other virtue objects over the years, people and ideas whose surplus righteousness could be extracted for deployment elsewhere. The great virtue-rush of the 1990s, for example, was focused on children, then thought to be the last word in overwhelming, noncontroversial goodness. Who could be against kids? No one, of course, and so the race was on to justify in their name whatever your program happened to be. In the course of Hillary Clinton’s 1996 book, It Takes a Village, for example, this favorite rationale of the day—think of the children!—was deployed to explain her husband’s draconian crime bill as well as more directly child-related causes such as charter schools.
For all that, the Clinton Foundation event I attended gives us a context in which to understand Hillary’s most important moment as a maker of policy—her four years as Barack Obama’s secretary of state. Although her purview then was foreign policy, we can see from her deeds at State how she intends to tackle the great economic question of our time. The themes will be familiar to anyone who follows Democratic politics closely. She cast herself as a high-minded ally of Silicon Valley. She enshrined a version of feminism in which liberation is, in part, a matter of taking out loans from banks in order to become an entrepreneur. And between these two doctrines, it seems clear that income inequality has little role in the grand sweep of her political career.
Frank continues, using the microloan craze as a microcosm of the cozy bedfellows made between “professional-class liberalism” and corporate capitalism.
The idea that unifies and explains these disparate initiatives is the theology of microfinance. It is hard to overstate the attraction of this magical idea to the liberal class, or at least to that part of it working in the foreign-aid sector. Microlending, such people have come to believe over the past few decades, was the magic elixir for sexism and poverty, the financial innovation that would save the Third World. Foundations embraced it. Careers were built on it. Billions were spent advancing it.
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And it was all so simple. While national leaders busied themselves with the macro-matters of privatizing and deregulating, microloans would bring the science of markets down to the individual. Merely by providing impoverished individuals with a tiny loan of fifty or a hundred dollars, it was thought, you could put them on the road to entrepreneurial self-sufficiency, you could make entire countries prosper, you could bring about economic development itself.
What was most attractive about microlending was what it was not, what it made unnecessary: any sort of collective action by poor people coming together in governments or unions. The international development community now knew that such institutions had no real role in human prosperity. Instead, we were to understand poverty in the familiar terms of entrepreneurship and individual merit, as though the hard work of millions of single, unconnected people—plus cell phones, bank accounts, and a little capital—was what was required to remedy the Third World’s vast problems. Millions of people would sell one another baskets they had made, or coal they had dug out of the trash heap, and suddenly they were entrepreneurs, racing to the top. The key to development was not doing something to limit the grasp of Western banks, in other words; it was extending Western banking methods to encompass every last individual on earth.
Microlending is a perfect expression of Clintonism, since it brings together wealthy financial interests with rhetoric that sounds outrageously idealistic. Microlending permits all manner of networking, posturing, and profit taking among the lenders while doing nothing to change actual power relations—the ultimate win-win.
Of course, Hillary and her revolving door team at State loved loved loved for-profit microloans made by western banks! Just one minor problem!
As strategies for ending poverty go, microlending appears to be among the worst that has ever been tried, just one step up from doing nothing at all to help the poor. In a carefully researched 2010 book called Why Doesn’t Microfinance Work? the development consultant Milford Bateman debunks virtually every aspect of the microloan gospel. Microlending doesn’t empower women, Bateman writes—instead, it makes them into debtors. It encourages people to take up small, futile enterprises that have no chance of growing or employing others. Sometimes microborrowers don’t even start businesses at all; they just spend the loan on whatever. Even worse: the expert studies that originally sparked the microlending boom turn out, upon reexamination, to have been badly flawed.
Nearly every country where microlending has been an important development strategy for the past few decades, Bateman writes, is now a disaster zone of indebtedness and economic backwardness. When he tells us that “the increasing dominance of the microfinance model in developing countries is causally associated with their progressive deindustrialization and infantilization,” he is being polite. The terrible implication of the facts he has uncovered is that microlending achieves the opposite of development. Even Soviet-style Communism, with its frequently mocked Five Year Plans, worked better than this strategy does, as Bateman shows in a tragic look at microloan-saturated Bosnia.
No matter. The liberal class is unlikely to abandon its romance with microfinance, for yet another reason: it is profitable. Lending to the poor, as every subprime-mortgage originator knows, can be a lucrative business. Mixed with international feminist self-righteousness, it is also a bulletproof business, immune to criticism. Naturally the international goodness community discovered that empowering poor women by lending to them at usurious interest rates was a fine thing all around.
It goes on and on and on, virtuewashing Walmart, Coca-Cola, Goldman Sachs. A “global commerce in compassion”, as Frank calls it. And at the center of it all?
But let’s be clear. What drives this market are the buyers. Like Walmart and Goldman Sachs locking arms with the State Department, what these virtue-consumers are doing is purchasing liberalism offsets, an ideological version of the carbon offsets that polluters sometimes buy in order to compensate for the smog they churn out.
And at the apex of all this idealism stands the Clinton Foundation, a veritable market-maker in the world’s vast, swirling virtue trade. The former president who runs the whole show is “the world’s leading philanthropic dealmaker,” according to a book on the subject. Under his watchful eye, all the concerned parties are brought together: the moral superstars, the billionaires, and of course the professionals, who organize, intone, and advise. Virtue changes hands. Good causes are funded. Compassion is radiated and absorbed.
This is modern liberalism in action: an unregulated virtue exchange in which representatives of one class of humanity ritually forgive the sins of another class, all of it convened and facilitated by a vast army of well-credentialed American technocrats, while the objects of their high and noble compassion sink slowly back into a preindustrial state.
Frank ends pondering the contrast between the American women who lost welfare and jobs due to Clintonism in the 90s with the third-world women being held up and extolled by billionaires.
For poor and working-class American women, the floor was pulled up and hauled off to the landfill some twenty years ago. There is no State Department somewhere to pay for their cell phones or to pick up their day-care expenses. And one of the people who helped to work this deed was the very woman I watched present herself as the champion of the world’s downtrodden femininity.
Sitting there in gilded Manhattan, I thought of all the abandoned factories and postindustrial desolation in the surrounding regions, and I mused on how, in such places, the Democratic establishment was receding into terminal insignificance. It had virtually nothing to say to the people who inhabit that land of waste and futility.
But for the faithful liberals at the Clinton Foundation gathering in New York, none of that mattered. The party’s deficit in relevance to average citizens was more than made up by its massive surplus in moral virtue. Here, inside the theater, the big foundations and the great fashion magazines were staging a pageant of goodness unquestionable, and the liberal class was swimming happily in its home element.
They knew which things were necessary to make up a liberal movement, and all of the ingredients were present: well-meaning billionaires; grant makers and grant recipients; Hollywood stars who talked about social media; female entrepreneurs from the Third World; and, of course, an audience of hundreds, who clapped and cheered enthusiastically every time one of their well-graduated leaders wandered across the stage. The performance of liberalism was so realistic one could almost believe it lived.
Hard to find much to add to Thomas Frank’s eloquent insight.
Vote Bernie!