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Economic progressivism orfiscalprogressivism is apolitical andeconomic philosophy incorporating thesocioeconomic principles ofsocial democrats andpolitical progressives. These views are often rooted in the concept ofsocial justice and have the goal of improving thehuman condition throughgovernment regulation,social protections and the maintenance ofpublic goods.[1] It is not to be confused with the more general idea ofprogress in relation toeconomic growth.
Economic progressivism is based on the idea thatcapitalistmarkets left to operate with limited government regulation are inherently unfair, favoringbig business, largecorporations and thewealthy. Progressives believe that a fair market should result in anormal distribution of wealth, but in most countries the wealthy earn heavily disproportionate incomes. Hence, progressives advocate controlling the markets through public protections that they believe will favorupward mobility, diminishincome inequality and reversemarginalization. Specific economic policies that are considered progressive includeprogressive taxes,income redistribution aimed at reducinginequalities of wealth, a comprehensive package ofpublic services,universal health care, resistinginvoluntary unemployment,public education,social security,minimum wage laws,antitrust laws, legislation protectingworkers' rights and the rights oftrade unions and awelfare state.
The progressive economic philosophy is typically defined in opposition toeconomic liberalism,laissez-faire and the conclusions ofAustrian andChicago economics. Many organizations that promote economic progressivism can be characterized from a range of applyingcriticism of capitalism to beinganti-capitalist and include principles and policies based onKeynesianism,Marxism and otherleft-wing schools of socioeconomic thought. Economic progressivism can also be seen as a potential response to and treatment of social and economic problems such asaffluenza,environmental racism,inverted totalitarianism,market fundamentalism,wage slavery, and "socialism for the rich and capitalism for the poor" as well as a counter-argument to theculture of capitalism,prosperity theology andrugged individualism.
Economic progressivism is compounded with the larger politicalprogressive movement that emerged in the Western World during the late 19th century and early 20th century. During this time, the movement and its ideas directly confronted thelaissez-faire economics and increasing socioeconomicinequality that characterised society. The termeconomic progressivism, especially while describing policies ofprogressive taxation,social welfare and generalleftist economic measures, finds particular resonance in the parlance of the United States compared to rest of the world. Nations in Europe developed social welfare systems either bysocial-democratic governments or by moreright-wing governments as concessions to pacify the population from moving further towards the left.[2] Meanwhile, less developed countries andpostcolonial nations in Africa and Asia developed a tradition of social welfare systems being implemented to aid the population develop across social and economic indices. The development of economic progressivism has been markedly different across different parts of the world.
Progressive economic policies in Europe have a slightly longer history[3] and many of the policies are not explicitly termed as "progressive politics". In Britain, England and Wales had theEnglish Poor Laws in place since the 16th century. The laws existed under various period undergoing several modifications until the 20th century, when theLiberal Party implemented severalwelfare reforms across the country. TheLiberal welfare reforms from 1906 to 1914 strengthened labour laws and the position of trade unions, expanded education and introduced a pension system for the elderly, among other things. In Germany, chancellorOtto von Bismarck created the first comprehensivewelfare state in modern industrial society. To curb the influence ofsocialism and to appease the working-class population, Bismarck employedState Socialism and implemented a series of laws during the 1880s and 1890s. These included the Workers Protection Act, the Health Insurance Bill, the Accident Insurance Bill and the Old Age and Disability Insurance Bill, all designed to increase the welfare of the newly create German nation state.
Progressive economic policies in terms of the welfare state expanded significantly across Europe in thepost-World War II period. This manifested in the domestic politics in those countries. In Germany, one had the struggle betweenleft-leaningSocial Democrats and theright-leaningChristian Democrats. In the United Kingdom, the struggle was betweenLabour on the left and theConservatives on the right. The welfare state and policies such asprogressive taxation emerged throughout Europe. Scandinavian nations became exemplary in introducing steep rates of progressive taxation and extensive welfare schemes as part of theirNordic model.[4] However, the rise ofneoliberalfree-market economics led to a decline in progressive economics towards the end of the 20th century, particularly in the United Kingdom, where the premiership ofMargaret Thatcher saw the dismantling of powerfultrade unions, reduction ofgovernment expenditure and increasedprivatisation in the 1980s which continued throughout he 1990s.
The aftermath of theGreat Recession saw the resurgence of a demand for a return to increased government expenditure. Theanti-austerity movement that emerged during theGreat Recession in Europe saw countries such as Greece, Spain and the United Kingdom.[clarification needed] Like theOccupy Wall Street movement across the Atlantic, people started protesting government response to the financial meltdown which involved cutting down of government spending to manage budget deficits. This involved cutting spending on measures such as healthcare, education and other social welfare benefits.
In the United States, the termprogressive is often contrasted withneoliberal free-market ideology. The progressive movement emerged during the 1890s and 1920s in the so-calledProgressive Era. Within this larger political movement tackling corruption and social inequalities was the introduction of economic policies that aimed to neutralise the worst excess ofcapitalism. This era was marked by the growth oflabour unions such as theAmerican Federation of Labour, the expansion oflabour rights, the establishment ofantitrust laws targeting major monopolistic firms and industries and an increase in taxation of the upper class. Progressive economic policies emerged as a response to the excessivebig business power and the concentration of wealth and power amongst a very small fraction of society during theGilded Age. This period introduced many landmark economic policies, including the introduction of an income tax in 1913. Theestate tax also introduced in 1897, first in the state of New York. By 1924, estates valued at more than $10 million were taxed a rate of 40%.[5]However, the structural legacy of slavery entrenched racial hierarchies within the American labor force.[6][7] These hierarchies created a segmented labor market in which access to employment, wages, and social mobility was distributed along racial lines.[8] This fragmentation contributed to divergent and sometimes conflicting political interests within the working class, undermining efforts at cross-racial class solidarity.[9] As a result, the development of a unified left-wing political movement in the United States was constrained. Racial stratification also limited public support for redistributive policies—such as taxation, welfare programs, and income equality—reducing the political viability of economic progressivism in the American context.[10]
During theGreat Depression in the 1930s,Democratic PresidentFranklin D. Roosevelt's administration created theNew Deal programme. The government become heavily involved in stimulating economic growth through increased expenditure, followingKeynesian economic policies of using fiscal policy through government subsidies and investment in various industries like infrastructure, agriculture and commodities to provide to increase economic output. TheGreat Depression in the United States was marked by massive unemployment and poverty. The New Deal programme provided jobs through investment in many large infrastructure projects such as housing, transport infrastructure, civil administration and farming. There was also the creation of government departments such as thePublic Works Administration to oversee government activity in industry. From then until the late 1960s, with Democratic PresidentLyndon B. Johnson'sGreat Society program, there was significant government activity in investing in industries, education, healthcare and general social welfare of the population. During the presidency ofRepublicanRonald Reagan in the 1980s, neoliberalfree-market economics came back into prominence in government policy. This period was characterised by increasing privatisation in industries, healthcare and education. It was also marked by a decrease in taxation of businesses and a decrease in government reliance of fiscal policy, with increasing use of monetary policy instead.
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Progressive economics—also known asNew Progressive Economics[11]—made a comeback in the United States to the forefront public discourse after theGreat Recession of the late 2000s. Popular dissatisfaction with government policies favouring big business and the bailout of banks led to the emergence of theOccupy Wall Street movement. Subsequently, Vermont SenatorBernie Sanders and his policies of progressive taxation,universal healthcare for all (Medicare for All) and free higher education, amongst others, also gained prominence across the country. Sanders, who ran for the Democratic presidential nomination in both the 2016 and 2020 presidential primaries, lost out to his rivals in securing the nomination. However, his policies have seen a rise in popularity and mainstream acceptance within the time period. Since then, many other politicians from the Democratic Party advocating progressive economic policies begun to gain prominence nationally. Among them are SenatorElizabeth Warren, who also sought to win the 2020 democratic presidential nomination, along with members of theCongressional Progressive Caucus. Even some in theRepublican Party have advocated for economic progressivism (but using populist and traditionalist rather than social justice rhetoric).[needs update]
