Private-Equity Democrats

The Democratic party appears to be split between people who believe the private-equity business to be above criticism and those who disagree. Mayor Booker of Newark had been the most prominent private-equity Democrat until ex-President Clinton spoke up in defense of Mitt Romney's business record yesterday. Clinton made sure to say that Romney's economic plans for the nation are inferior to President Obama's, but those remarks were buried under headlines reporting that another prominent Democrat had criticized the Obama campaign for criticizing Bain Capital. Like Booker, Clinton has personal reasons for his stance. In Clinton's case, he admits to having "friends" in private equity. He objects in particular to the implicit portrayal of private equity as "bad work." On this issue, then, Clinton (and Booker) stand to the right of Newt Gingrich, who notoriously described Bain as a "vulture capitalist" firm during his campaign against Romney, insofar as "left" and "right" positions are determined by your stance on capitalism.

The real issue isn't whether Booker or Clinton is criticizing the President, but whether they're faithful to the heritage of their party. Going back to its Jeffersonian antecedents, the Democratic party has often if not always taken a critical if not adversarial stance toward finance. Jefferson himself had a physiocratic bias in favor of agriculture as the true basis of national wealth, while classic "Jacksonian Democracy" in the 19th century idealized physical labor at the expense of speculation and banking. Before Karl Marx, Democrats harbored suspicions that capitalists, owners, bosses, or the "money power" in general weren't giving working people their due. This stance often took extreme or irrational form, from Jefferson's anti-modern physiocracy to the antebellum argument that wage slavery was worse than literal human slavery. But the consistent point remained that there was always something to criticize, from the perspective or ordinary working people, in the workings of capital itself, not just the practices of specific companies or executives. Apologists like Booker and Clinton seem to be saying that there is nothing inherent to criticize in private equity or, by implicit extension, other forms of finance capital. But regardless of what Democrats see as the relative virtues and flaws of Bain Capital, there is always an argument to be made against the exploitation of labor by capital, or else there's no reason for a "left" to exist in this country, by anyone's definition. Democrats who miss this point can't be ranked with the left unless you really believe, as they may themselves, that the real issue between "left" and "right" is the power of the state. But if you still believe that "left" has something to do with the interests of the working class, then you should question again whether a Democratic party represented by Bill Clinton and Cory Booker is really on your side.