Court decisions are eroding American democratic legitimacy now, kneecapping its ability to combat existential threats

At the end of June, the conservative-dominated U.S. Supreme Court issued an explosive series of politically and ideologically motivated decisions designed to fundamentally reshape society. Over the course of just a few days, the Court struck down federal abortion rights, trampled on indigenous people’s rights, further eroded the separation between church and state, aided the proliferation of gun violence, and kneecapped the federal government’s ability to address climate change.

While shocking, these rulings are not surprising. In fact, they are part of a decades-long, highly successful war by the political Right to dismantle the mild regulatory and social democratic state that developed following the New Deal and World War II, and revive and reinvigorate private, elite (i.e. wealthy and white) control of society and the economy. While such efforts must be resisted, and the war is far from over, progressives can no longer avoid the fact that the contemporary model of regulating private enterprise and blunting the worst excesses of capitalism is failing — failing not because people aren’t voting the right way or because of changes in how we communicate, but failing because of its own structural limitations.

Given the existential threat of catastrophic climate change, and the rising tide of right-wing extremism, a different approach is needed, and needed soon. One alternative is to shift away from the strategy of trying to regulate for-profit corporations and tax large concentrations of privately owned wealth, and instead move toward a system based on principles of genuine economic and political democracy, and comprised of various forms of public and collective ownership.

Whither Social Democracy?

Social democracy was initially founded on the idea that society could transition from capitalism to socialism peacefully via democratic political institutions. But in its modern incarnation, the term more often refers to a political and economic system based on the idea that the excesses and injustices of capitalism can be ameliorated primarily through state regulation of private enterprise, rather than large-order shifts in the ownership of those enterprises. As the German revisionist Marxist Eduard Bernstein, often considered the father of social democracy, once put it, socialization ​“can also take place if the general public intervenes ever more strongly in support of economic life through laws and ordinances,” via, for instance, minimum-wage legislation, occupational safety standards, price controls and other regulations. This regulatory approach is, then, usually combined with both a strong social safety net supported by tax-and-spend policies and the extension of political and social rights to traditionally marginalized groups.

Following World War II, social democrats (in either name or deed) came to power in many countries around the world, especially those in Europe that had been economically and socially devastated by the war. With the economic and business elite in many of those countries temporarily discredited by their associations and infatuations with fascism, some of these countries were able to build strong welfare states characterized by empowered trade unions, reductions in economic inequality, and marked improvements in health and living standards. In the United States, a weaker version of social democracy took hold through the federal government’s robust response to the Great Depression (the New Deal) and the centralizing forces of war mobilization.

While some significant ownership shifts did occur, especially in the early days of the New Deal, the U.S. variant of social democracy was always primarily regulatory in nature, with famous examples being financial laws such as the Glass-Steagall Act (which limited the activities of private banks), environmental laws (which restrict pollution and extraction), food, drug and medical device quality laws, labor laws, and so on. Moreover, actual implementation and enforcement of these laws was often delegated to regulatory agencies, such as the Food and Drug Administration and the Environmental Protection Agency, giving rise to the term the ​“regulatory state.” Like in Europe, this approach initially found some success. By the late-1970s, income and wealth inequality had hit historic lows, poverty was falling, rivers and the air were being cleaned up, labor unions were still comparatively strong, living standards had risen, and life expectancy had improved dramatically.

However, since its inception, business elites and their political allies have chafed against this regulatory approach to moderating capitalism (while, paradoxically, often using it to their own material benefit). Commenting on the opposition he faced, Franklin D. Roosevelt (FDR) once famously stated ​“we had to struggle with the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering… Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me — and I welcome their hatred.” Like today, these business interests attempted to thwart the implementation of FDR’s social democratic programs through the Supreme Court — but, ultimately, he was able to face them down through, for instance, threatening to ​“pack” the Court.

However, the real counterattack against the regulatory state began in the late 1960s and early 1970s. Capitalizing on the social and economic upheavals of the time, the business community and economic elite, along with their ​“free market” allies in academia, sprang into action. In 1971, just a few months before he was nominated to serve on the Supreme Court, Lewis F. Powell Jr. — a corporate lawyer who sat on the board of the tobacco company Philip Morris — wrote a letter to the U.S. Chamber of Commerce castigating the business community for its supposed inattention to (and complicity in) the ​“attack on the American free enterprise system.”

The business elite responded, and soon vast sums of money began flowing to an array of new and existing right-wing organizations — including the American Enterprise Institute (founded in 1938), the Reason Foundation (founded 1968), the Heritage Foundation (founded in 1973), the Cato Institute (founded in 1977), the Manhattan Institute (founded in 1977), the American Legislative Exchange Council (ALEC; founded in 1973), and the Federalist Society (founded 1982). The effort was so successful that by Ronald Reagan’s first term, these organizations provided more than half of his high-level presidential appointments.

Under the influence and direction of these organizations and their acolytes, deregulation of the U.S. economy kicked into high gear, championed by both Republicans and Democrats alike. This includes high-profile legislation like, for instance, the 1999 law which essentially repealed the Glass-Steagall Act. However, more insidiously, it also includes a full-blown assault on the agencies tasked with implementing and monitoring regulatory rules. Regulatory agencies are regularly swamped with industry lawsuits and lobbying, vilified by corporate-funded propaganda campaigns, purposefully saddled with leaders who are hostile to their mission (e.g. Rick Perry’s being appointed Secretary of Energy in 2017, an agency he called to be eliminated a few years earlier), sapped of talent by the private sector and, most recently, undercut by the Supreme Court.

In the recent case of West Virginia v. Environmental Protection Agency (EPA), the Supreme Court’s six conservative judges (all of whom are members of the Federalist Society) ruled that the regulatory agency had overstepped its authority by promulgating the Clean Power Plan rule — which had the goal of reducing carbon emissions by requiring utilities to invest in efficiency measures and shift generation from high-emitting to low emitting sources. By both action and deed, the EPA case demonstrates the Supreme Court’s intent to dismantle as much of the remaining regulatory apparatus as possible. First and foremost, that the Court took up the case was highly unusual given that the Clean Power Plan had been scrapped by President Trump and was never formally implemented. Second, for the first time, the Court’s majority specifically invoked the ​“Major Questions Doctrine,” which is a relatively novel and deeply ambiguous judicially created concept (in other words, created by the Court) that allows the Supreme Court to intervene and strike down a regulatory agency’s action if it ​“concerns an issue of vast economic and political significance.” And third, the ruling — specifically, Justice Neil Gorsuch’s concurring opinion — explicitly takes aim at ​“the explosive growth of the administrative state.”

President Biden has signaled interest in using executive powers wherever possible — for instance, on abortion access and climate change — and the Democratic Party leadership in Congress has attempted to pass new laws that would reverse or mitigate some of the Court’s rulings. But these efforts are essentially a rear-guard action that ignores an important reality about the social democratic, regulatory model: namely, that the approach is structurally limited in what it can achieve. By leaving powerful for-profit corporations intact and large pools of capital in elite, private hands, social democracy as currently practiced all but guarantees that even the strongest regulations and laws will eventually be eroded, undermined, captured and manipulated by these economically powerful entities and individuals.

Because of this reality, the social democratic model is in retreat around the world, including in its European heartlands. In Sweden, the Gini Index (which measures inequality) has steadily risen from a low of 22.9 in 1981 to 29.3 in 2019. In Finland, trade union density has fallen precipitously in recent years, from a high of 80% in the early 1990s to just 58% today (a story repeated in many European countries). In France, the government of Emmanuel Macron is targeting several pillars of that country’s social democratic system, including the popular pension and retirement system. And in the United Kingdom, the country’s much-vaunted universal healthcare system — the National Health Service — is being slowly dismantled, defunded and privatized, leading to falling service quality and health outcomes.