Top economist Robert Reich ‘isn’t counting on a more progressive future’

Reich speaks to Sam Delaney to plot the course for capitalism and US politics beyond Covid-19

Robert Reich is having trouble with his Skype connection.

Neither of us can quite make the technology bring us face to face, or at least screen to screen. So we settle for a good, old-fashioned, pre-lockdown style phone call. I like to imagine him sat in his study in Berkeley, surrounded by books and scribbled-out charts that illustrate the mad unravelling of 21st-century capitalism. This is Reich’s stock-in-trade: the 74-year-old economist, professor and author has served in three presidential administrations under Gerald Ford, Jimmy Carter and Bill Clinton. He also worked on Obama’s economic advisory board. He has examined the murky intersection between politics, money and power first-hand and his assessments are bleak. He has written several bestselling books about capitalism’s descent from a force for progress to a mechanism for gluttony. But Reich is no fusty old academic: his vlogs (at robertreich.org) are passionate and compelling masterclasses in modern politics and economics. It is impossible to watch one without coming away exhilarated, curious and intellectually nourished. His new book, The System: Who Rigged It, How We Fix It, is a characteristically powerful and engaging study of inequality. Yes, he says, it is bad and getting worse. But no, not all hope is lost. If there is a solution to the unjust world we live in, Covid-19 might actually help us find it

The Big Issue: Hasn’t life under lockdown levelled things out for everyone? We’re all in the same boat now, right?

Robert Reich: No, the pandemic has not evened things out. It has in fact exacerbated the gap. It is allowing the wealthier to become wealthier and the poor to become that much poorer and more endangered. The wealth of America’s billionaires increased 10 per cent over the first three weeks of March while poverty rates have reached the highest in half a century.

How does that affect our political rights? Even the poor can vote…

Undoubtedly widening inequality is consistent and indeed produces corruption and undermines democracy. More and more wealth and income go to the top, more money flows into politics in ways that make it very difficult for ordinary people to have a say. The poor and working class are formally parts of our democracy but they really don’t have much of a voice in policy decisions any longer.

Isn’t there always going to be an elite running things at the top? They’re the ones with the energy to do it. The rest of us can’t be bothered.

That’s true up to a point but at different times in our history we’ve had either wider or lesser levels on inequality. For example between 1946 and the late ’70s the United States had a large and growing middle class – the people at the very top were relatively small in number and didn’t take home nearly as big a percentage of the nation’s wealth as they do now.

Facebook and Google are getting all the advertising and providing most of the news

What changed?

Starting in 1980 we’ve seen a very different picture. People’s wages have gone almost nowhere if you adjust for purchasing power and inflation. And yet the economy is almost twice as large as it was then. What happened to all the income and wealth? It went to the top. We haven’t seen such a concentration of wealth and incomes at the top since the 1890s, the so-called ‘gilded age’.

How exactly have the rich managed to get richer during the pandemic?

First of all you have Wall Street. The biggest banks continue to rake in huge amounts of money. It doesn’t seem to matter whether the economy is working or not. Money has to move and when it moves the banks take a share of it. Even with the [US] government programme to help small business it turns out the biggest banks raked in $10bn because the money had to pass through those institutions.

The richest man in the world, Jeff Bezos, increased his wealth since the start of the pandemic by $26bn – partly because Amazon became even more important for shipping goods. The likes of Netflix, Zoom and hi-tech companies have done wonderfully well.

But haven’t they helped the world cope with the impact of the pandemic better too?

That may be right but it also raises the question of whether the monopolisation of digital networks is necessary in order to give the benefit to the general public. All of these companies have monopolised their markets. Small newspapers and media are disappearing very rapidly and that has been accelerated by the crisis. Facebook and Google are getting all the advertising and providing most of the news. This is not good for democracy or for the economy.

Trump has no grounds to suspend or cancel the election – but I think he is going to try

Are we learning to be more collectively minded? Won’t governments have to become more compassionate now?

I think it’s possible. It may be wishful but that wish is within the realm of possibility. Traumas such as deep depressions, wars and pandemics can have profound effects on societies going forward. In the US and UK many reforms have gone ahead due to a renewed sense of social responsibility after big traumas. The NHS in the UK after 1945. The US introduced social security during the Great Depression. National traumas can remind people of our interdependence. But it is important to bear in mind that national traumas can have the opposite effect too, encouraging authoritarian regimes such as in Germany in the 1930s.

So while it is tempting to think that the pandemic might eventually result in a more progressive and collectively minded era ahead, it is by no means guaranteed and could go the other way. Particularly if we don’t have the right leadership in place.

That could mean more taxes to pay for everything. Is it harder to legislate for that these days?

That begs the question of whether we come out of this with enough social solidarity for us to break through the power of the elites to control our taxation and wealth distribution. In the gilded age of the 1890s the wealthy elites had great control over our politicians and government. It was only after the Great Depression and First World War that the great ‘robber barons’ and aristocracies of America lost their grip. We’ve seen this before and history does move in cycles. As Mark Twain once quipped, “History doesn’t repeat itself but it often rhymes.” So we could see a more progressive future but I don’t count on it.

Will politicians have the will and drive to bring about real change?

It is not clear. Joe Biden is the presumptive democratic nominee for president. I believe there is a good chance he will be elected in November because the majority of Americans on every poll are ready to dump Trump. But we don’t know if Biden will be a caretaker who will simply try to repair the damage Trump has done or someone who will try to cash in on this public readiness for reform that the crisis has created and drive something more meaningful forward. It is unclear at the moment which he will be.

Won’t he be as in hock to the same corporate interests and powerful elites as any other president?

It’s less of a question of direct financial hock as you put it. It’s more a matter of sociology. I have worked for a number of presidents and I have never witnessed anything that suggests direct corruption. Corruption is much more indirect. It is about the social circles a president runs in and the people the president trusts. Both the Republican and Democratic parties in America have very large corporate and Wall Street interests that are very potent.

But historically we’ve seen progressive presidents emerge in both parties, even in periods where the wealthy were very influential, to surprise everyone and become reformers. Like specifically Teddy Roosevelt in 1901. He was a Republican at a time when big money dictated political outcomes and the political players were the robber barons of that age. But Teddy Roosevelt was a reformer and he used the progressive feelings that were bubbling up in the populus to drive reform.

Will the presidential election still go ahead on November 3?

I think so. I think constitutionally Trump has no grounds to suspend or cancel the election – but I think he is going to try.

You’ve said that Trump has purposely worsened the Covid-19 crisis. Is that by sheer incompetence or a more calculated agenda?

The only agenda is Donald Trump himself. He is always his own primary agenda. He doesn’t care about the country or the people. Everything he says, every move he makes, every lie he utters is about Donald Trump. He will only choose his own interests over those of the people and the country. That is sinister if it ends up killing people, which it has done. For two months he denied the risk – he said it was a hoax perpetrated by the democrats. He didn’t organise the federal government to be ready, he minimised what the threat was to the public. To this day he is doling out equipment on the basis of political leanings of the state governors. So I really think he will have blood on his hands.

The System: Who Rigged It, How We Fix It by Robert B Reich is out on May 24 (Picador, £14.99 hardback, £9.99 ebook)

This article is part of our After the Virus series. To read other ideas about the world beyond Covid-19 from Rutger Bregman, George Clarke and more, head here