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Rodney Loeppky A Deal They Can’t Resist De Gruyter Contemporary Social Sciences Volume 7 Rodney Loeppky A Deal They Can’t Resist Adaptive Accumulation and American Public Policy ISBN 978-3-11-076174-0 e-ISBN (PDF) 978-3-11-076180-1 e-ISBN (EPUB) 978-3-11-076185-6 ISSN 2747-5689 e-ISSN 2747-5697 Library of Congress Control Number: 2021947924 Bibliographic information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available on the Internet at http://dnb.dnb.de. © 2022 Walter de Gruyter GmbH, Berlin/Boston Cover image: Nigel Stripe / iStock / Getty Images Plus (stethoscope) BrianAJackson / iStock / Getty Images Plus (doctoral cap) Printing and binding: CPI books GmbH, Leck www.degruyter.com Contents Chapter 1: Introduction 1 Chapter 2: Adaptive Accumulation: Public Objectives, Private Revenues 7 Chapter 3: The Military and Adaptive Accumulation 18 . Defense Policy as Public Policy 19 . Peace Dividends: Do More with Less (or More?) 21 . Transforming Power Projection Abroad 23 . On the Homefront: Utilities and Housing 29 .. Utilities 30 .. Housing 33 . Conclusion 38 Chapter 4: Health, Healthcare, and Adaptive Accumulation 39 . US Health Reform Through the Twentieth Century 40 . Adapting the Component Parts of US Healthcare 43 .. Transforming Medicare 44 .. Drugs, USSeniors, and Medicare 50 .. The Affordable Care Act 54 . Conclusion: The Future of US Health 60 Chapter 5: Education Reform and Adaptive Accumulation 65 . Education as Crisis 66 . Mining Public Schools 68 . Governmental Market Makers 78 . Education and the Culture of Choice 85 . Conclusion 89 Chapter 6: Incarceration, Detention, and Adaptive Accumulation 91 . The Neo-conservative Turn and ‘Law and Order’ 92 . Corporate Strategies in Incarceration and Detainment 95 . Government, Public Policy, and Incarceration 103 . Politico-Cultural Undercurrents: Conditioning Incarceration 113 . Conclusion 118 Chapter 7: Conclusion—Moving Forward in America 120 VI Contents References 127 Index 143 Chapter 1: Introduction The study of America is the scrutiny of contradictions. It is, after all, a place where unparalleled wealth is accompanied by extensive, grinding poverty. Whereelsedowefindthemostadvancedbiomedicalandhealthestablishment intheworld,matchedbytheexclusionoftensofmillionsfromhealthcare?Itisa society with a reverence for individual rights and freedoms, but one which has also fostered the largest per capita prison population in the world. Indeed, in the land of ostensible equality and opportunity, the extent of class, race, and gender inequalities often feels overwhelming. Some have argued that these so- cialincongruitiessignaladecayingsociety,possiblyeventhedeclineofaUSem- pire,notdissimilarfromthecorrosivedynamicsthatextinguishedancientRome or allowed the sun to set on the British Empire (Wood, 2004; Ferguson, 2005; Greer, 2014). Americans, however, have neither viewed themselves with such grandeur nor understood themselves operating within any predictable pattern of history. Onthecontrary,arevolutionaryhistoricalnarrativepervadesAmericanpolitical culture,with‘exceptionalism’remainingaconstantrefrain.Thespecialbrandof US democracy and its faith in human progress,the capitalist marketplace, and theindividualwill,ultimately,arethoughttoovercomeallchallenges.Mostpo- litical economists and social theorists, of course, have viewed this proposition with skepticism, focusing their criticism on the specificity of US capitalism, with its strong neoliberal characteristics and grossly unequal social outcomes. Nowhere in the capitalist world have the extensions of the free market been asgreatastheyhaveintheUnitedStates,whereNancyFraser(2019)hasargued that the post-Reagan battle between reactionary neoliberals (Republican-led) andprogressiveneoliberals(Democrat-led)hasresultedinthehyper-reactionary neoliberal brand of the Trump administration. ThepoliticaluniversethatTrumpupendedwashighlyrestrictive.Itwasbuiltaroundthe oppositionbetweentwoversionsofneoliberalism,distinguishedchieflyontheaxisofrec- ognition.Granted,onecouldchoosebetweenmulticulturalismandethnonationalism.But one was stuck, either way,with financialization and deindustrialization.With the menu limitedtoprogressiveandreactionaryneoliberalism,therewasnoforcetoopposethedec- imation of working-class and middle-class standards of living. Anti-neoliberal projects were severelymarginalized,if notsimplyexcluded, from thepublicsphere(2019,p.18). ThisisnottosaythatneoliberalcapitalismintheU.S.proceedsinacompletely unfettered fashion—US capital is subject to state regulation (both federal and state), just like everywhere else in the world. But US political culture validates https://doi.org/10.1515/9783110761801-001 2 Chapter1:Introduction marketcompetitionacrosssocietalactivitiesthatareviewedelsewhereasinher- ently public—from postal service to post-secondary education, from healthcare to incarceration. Even in its willingness to project military power abroad,polit- icaleconomistsseethemaintenanceofan‘empireofcapital’,pryingopensoci- etiestobetteraccommodatethefreemovementof(especiallyUS)capital(Wood, 2002). Whyshouldanyofthiscomeasasurprise?Afterall,thishaslongbeenthe ageofneoliberalism,thehistoryofwhichputstheAnglo-Americanworldatthe cuttingedge.Thepedigreeisdifficulttodeny:fromtheReaganandThatcherrev- olutions,through‘thirdway’ClintoniansandBlairites,andontothefull-blown neoliberal fury of the Trump and Johnson administrations. Neoliberalism in Anglo-Americancountriesissaidtobemorethanjusttheuptakeofclassicallib- eral principles—rather, it is the unwavering disavowal of all things Keynesian and the systematic dismantling of the institutions of post-war society (Peet, 2003). At the same time, however, more than a whiff of hypocrisy is notable here, because this disavowal only seems to hold while capitalism is bullish in nature.Wheneverprospectsforeconomicgrowthslow—theSavings&LoanCri- sis,BlackMonday,the2008financialcrisis,ortheCOVID19shutdown—eventhe starkest free market advocates in Congress and elsewhere willingly endorse multi-billion or trillion-dollargovernment interventions. Thisbookinterrogates,beyondsuchbailouts,whetherthe‘unbridled’brand ofUSneoliberalism,infact,alwaysholdstrue.Certainly,thefinancialcriseslist- ed above demonstrate an especially free ranging financial market,with a good deal of industry-friendly regulatory oversight. In that arena, it could be said thatthestatehas,intermittently,recededfromview,allowingamuchwider,un- supervised ambit of corporate activity. And one would be correct for sensing a moregeneral‘retreatofthestate’acrossawidearrayofactivities,asthespecter of ‘privatization’ seems ubiquitous at all levels of government. It has been esti- mated,infact,thatofthe$6trillioningovernmentspendingacrosstheU.S.,at leastafull$1trillionnowgoestoprivatecompanies(Ball,2014).Alargepartof thatprivatizationdynamic,however,doesnotsuggestthestandardimageofgov- ernment‘gettingoutoftheway’.Thisworkmaintainsthattherehasbeenalarge- scalemovementofcapitalintocentralpublicpolicydomains,wheregovernment retains and even builds on its dominant functions. More specifically, it argues that part of the development of US neoliberalism involves adaptive accumulation, a process in which capital allies or aligns itself with public objectives andinstitutions,asameanstotransformorreroutepublicrevenuesintoprivate profitstreams.Alongtheway,corporateorganizations‘adapt’theirrolesaspure market actors, taking up and inhabiting quasi-public aspirations as a central part of their commercial mission. The state, in all its complexities, proceeds Chapter1:Introduction 3 with this relationship, as it both addresses budgetary dilemmas brought on by regularroundsofausterityandextendsorcarvesoutnewareasofaccumulative growth for corporate America. The sectors involved range in scope and magnitude, from substantial to enormous, but the present work does not presume to capture every manifesta- tion of this process. Instead, it gives an indicative account of concrete cases that challenges our sense of a hyper-neoliberal US political economy, where the ‘rules of reproduction’ are not as self-evident as we might assume. Samuel Knafo andBenno Teschke(2020)havemade theargument that whenweexam- ine historicallyspecificcases of capitalistdevelopment, it is imperativethatwe notreadthenatureoroutcomeoftheirdevelopmentfromsomeinherentattrib- utesofcapitalism.Intheauthors’words,thereisanecessitytoavoid,“afetish- izedconception,”where“[what]isconceptually renderedasanauto-generative logicofactiongrateswith thehistoricaltrackingofcapitalism…asacontested and concrete process” (2020, p.77).The authors seek “to open up space for re- thinking capitalism as a historically open rather than theoretically-closed cate- gory”(2020,p.77).Theutilizationofadaptiveaccumulationtoviewthespecific natureofUSpoliticaleconomydemandsthissamehistoricallyopenperspective. It requires that we consider the existence of a symbiotic relationship between state and capital across a range of significant economic sectors, potentially, as a constitutive part of American neoliberal development. In order to makethis argument,the workexamines four separatearenasof public policy—military, healthcare, education and incarceration—as cases in which adaptive accumulation has taken hold. Taken together, these sectors make up averylarge portion of public and private spendingand, as such, rep- resent a large share of US economic activity. Cobbling together estimates from only K-12 education, health, and incarceration, total government spending in these areas amounted to almost $5 trillion in 2019 (Wagner and Rabuy, 2017; Martin et al., 2021; Hanson, no date). Potentially, this reveals two possibilities with respect to US political economy. The first, obviously, is that sectors of such size exhibit a broad appeal for those seeking profit streams, as room to transform public spending through adaptive accumulation remains extensive. Second, and more important, it might be fair to say that US economic strength is as reliant on these publicly-funded sectors as it is on the vitality of either itsdomesticconsumptionofgoodsoritsfinancialsector.Thisissignificant,because within political economy, much of the sectoral spending involved would be categorized as ‘unproductive’ components of economic activity.The implica- tion is clear: in the heartland of neoliberal capitalism, publicly-funded sectors actuallyconstituteoneofthedifferentiaspecificathatdrivesAmericancapitalist development.Ratherthanseeingthemaseithermarginalattemptsto‘shoreup’ 4 Chapter1:Introduction capitalism or bloated government spending, it might be better to understand them as concrete specificities, integral to the US capitalist engine. Before getting to these sectors, however, the second chapter provides the basicoutlinesforadaptiveaccumulationasaninterpretivelens.Withthestrate- gicaimofreadability,thechapterhasbeendeliberatelylimitedinsizeandcon- ceptualscope.Thoselookingforalong,meandering,oroverlyabstractsurveyof literature on the state and political economy, or a‘deep dive’ into value theory and accumulation,will have to look elsewhere.The point here is to specify the context of US neoliberalism, from which questions concerning the unique formofUScapitalistpracticesemerge.Fromthis,thechapterpositionsadaptive accumulationwithinamorecriticalsetofperspectivesoninstitutions,anditsets outthevariousfunctionsthatsuchaccumulationservesitsparticipantsocialac- tors. Ultimately, the objective is an enhanced understanding of neoliberalism, where we gain both a different version of ‘privatization’ and a more nuanced view of what the public realm means for corporate actors. The thirdchapterproceeds toan examination of the public policysector in whichtalkofstate-supportedcapitalismallbegan:themilitary.Readersare,no doubt,morethanfamiliarwiththenotionofa‘military-industrialcomplex’,and it is the contemporary widespread application of that concept to other sectors that motivates a re-examination of neoliberalism in the American context. Log- ically,then,theworkbeginsbyexaminingthepotentialfor adaptiveaccumula- tion in US military matters.Importantly,the chaptergoesbeyondweapons pro- curement issues usually involved in such discussions, as they have been both wellexploredelsewhereandarenotespeciallyindicativeofadaptiveaccumula- tion.Instead,ithighlightsthemorerecentwaysinwhichUSmilitarypolicy—asa form of public policy—has redirected societal revenues into private profit streams.Thisisapublicpolicyprocessspecifictotheneoliberalera,anditdem- onstrates the manner in which corporate actors have been‘drafted’ into public objectives, all with an eye to maintaining forward deployment capacities and an increasingly expensive high-tech arsenal in the context of an uncertain post-Cold War budgetary environment. Following this, chapter four explores the domain that is often cited as the onlyseriousrivaltodefensespending:healthandhealthcare.Healthconstitutes animmenseareaofactivity,inwhichgovernmentinvolvementhasgrown,even whiletheU.S.remainstheleadingcaseoffreemarkethealthdeliveryworldwide. Here, the argument is made that across several government-run or -regulated healthcarestructures,fromMedicaretoso-calledhealthcareexchanges,corpora- tionshavebeenabletoinsertprivateformsofhealthcarepurchasingandprovi- sion,supportedbygovernmentpaymentsandsubsidies.ItiswellknownthatUS spendinginhealthistypicallytwiceasexpensiveasitisamongitsadvancedin-