An alternate American political spectrum

Red America, Blue America, political evolution

Figure 1. Alternate Political Spectrum

Many of us are familiar with the two-dimensional representation of political beliefs invented by David Nolan that maps political ideology along a left-right economic axis and an authoritarian-libertarian political axis. Nolan’s idea that we need more than one dimension was sound, but I find his focus on economic vs political freedom (he was a libertarian) to be limiting. It leaves out culture, which is important today.

I propose a different categorization specific to the US that is illustrated in Figure 1. It consists of the standard left-right axis for economics. For America, the economic left refers to an ideology that supports workers getting a bigger share of the economic pie (and management/investors getting a smaller share). Support for unions, steeply progressive income taxes, higher taxes on investment income, national insurance programs, and opposition to regressive taxes like sales taxes would be Left. Those on the Right would argue that since investment drives capital formation and economic growth that benefits all, investors and investment income should be more lightly taxed and oppose all economic policies supported by the Left. The dichotomy is simple: economic policy benefitting the Haves (Right) versus the Have Nots (Left).

The second axis is the cultural axis and is presented by red versus blue regions. We all have a clear idea of red states and blue states, those that vote Republican versus Democratic. This red-blue divide can be characterized at the county level as well. To a first approximation the red-blue divide at the county level represents a rural-urban divide. Before the Civil War, America's political dividing lines were drawn along regional borders. Historians refer to the Red-Blue divide then as regionalism. One way to see this is through a list of historical Red and Blue heroes in Table 1.

Table 1. Red and Blue Heroes over time

I see Thomas Jefferson as the original champion of Red America. He saw America as a nation of yeoman farmers, each largely self-sufficient. Local towns served the surrounding countryside providing markets where famers could sell their produce and secure needed things which they could not produce themselves. And then there would be port cities where larger-scale economic transactions took place between large scale producers (such as the planation that Jefferson owned) and foreign markets. Jefferson’s vision was of a pre-industrial traditional economy. As such it was deeply conservative, desiring to maintain an old order that was already fading during his lifetime. The Red archetype is rural and traditionalist.

In contrast to Jefferson was Alexander Hamilton, who I see as the original champion of Blue America. Hamilton had a vision of America as a modern nation, which would become one of the great nations of the world. He foresaw that it would be necessary to embrace industrial capitalism to do this. A modern financial system was needed to achieve the economic development he wanted. This meant America needed a central bank to perform a role similar to that played for Britain by the Bank of England. In pursuit of this objective, he called for (and got) the US government to accept Revolutionary War debt as a national debt on which the stipulated interest was to be paid. This debt had originally been issued by colonial governments who had no mechanism through which the debt could be repaid, and it had become worthless. Speculators had purchased this debt for pennies on the dollar and now had full-valued assets. Hamilton’s proposal served to enrich a small number of well-connected investors at the expense of ordinary people whose taxes serviced the debt. He may be seen as a tool of the rich and so clearly stands on the right end of the economic spectrum.

Yet Hamilton’s vision of America was correct, this was where the country was going, making him a Progressive. Hamiliton worked in commerce from a young age, was educated New York, where he became a vociferous patriot during the developing crisis with Britain and joined the fight when war broke out. He became an aide to General Washington during the war. After the war he practiced law in New York City and later served as Washington’s Treasury Secretary. Hamilton had the sort of meritocratic career typical of a member of the modern (Blue) credentialed elite. There is a recent musical celebrating him that is very popular in Blue America. Hamilton defines the Blue archetype as urban and progressive,

I also note that Jefferson was Southerner who lived off the income generated by his land and slave assets, while Hamilton was a Northerner who did not.  Once these two founding figures are established it is easy to see how Jackson and Lee as slave owners and representatives of the South line up with Jefferson. The link between Hamilton, Adams and Lincoln is not as easy to see. The Federalist party that Hamilton founded was based on building America into a fully modern county. Besides a national debt and central bank, it also meant tariffs to protect fledgling American industry, which Federalists were unable to achieve.

The Party Jefferson and Madison founded in opposition to Hamilton’s Federalists was opposed to both a central bank and tariffs. The central bank established under Hamilton was chartered for 20 years, which expired in 1811. Madison, then president, let it expire. The next year, war broke out and Madison found it very difficult to finance the war effort without a central bank. During the war it was necessary to encourage domestic production of critically needed materials that previously had been imported, which resulted in the development of an American manufacturing industry. When the war ended this industry faced annihilation by more advanced British competitors. In response to both the war-finance problem and the threatened loss of an entire industry, a new central bank and tariffs were established in 1816.

The anti-bank and anti-tariff party Jefferson had founded had enacted Hamiltonian policies. The Federalist party, which had become a joke, collapsed in that same year, beginning what is known as the Era of Good Feelings. But this did not sit well with all members of Jefferson’s party, now that there was no Federalist opponent. Gradually two factions within the party emerged, an “old” (conservative) faction who held to Jefferson’s original formulation as an anti-bank and anti-tariff party, and a “new” (progressive) faction that accepted the changes made under Madison.

The old faction found its leader in Andrew Jackson and became the Democratic party. Jefferson is labeled as a Democrat since his initial vision for his party more closely resembles the party Jackson founded than the “National Republican” faction supporting Adams, who would go on to become the Whigs. Lincoln was a Whig, who helped found the Republican party and served as its first president. Hence, for the antebellum period, Red codes into Democrats and Blue into their Federalist, National Republican, Whig or Republican opponents.

The original strongholds of Red and Blue America were the South and the New England, respectively. We can measure this by looking at the state vote in presidential elections over 1800-1860. Table 2 shows the aggregate voting behavior of the 33 states in existence at the start of the Civil War divided into three regions and for the whole. Averages for each region are given for three periods: antebellum (1800-60), Lincoln dispensation (1876-1932) and modern (1968-2020). I did not include the 1864, 1868 or 1872 elections as the first two did not involve an intact country and the third because there was no Democratic candidate in that year. I also skipped the 1972 and 1984 elections because they were so one-sided that they would provide no information on how regional voting patterns differ. For this analysis, Democratic voting was coded Red for the first two periods, while Republican voting was coded Red for the recent period. Table 2 shows a clear pattern of Red voting in the South and Blue voting in New England over all three periods, consistent with the original political cultures of these regions.

Table 2. Percentage of time different regions voted Red

Table 2 shows that Red and Blue culture maps into long-held regional voting patterns signifying political traditions. Over a large portion of American history the two major parties could be represented in terms of red-blue cultural differences. The political divide was largely based on the vertical axis of Figure 1. Before 1932 Republicans were on top and Democratic below. After 1968 it is the reverse. The idea of a Red America and a Blue America goes back to the very beginning of the country. We only see it as a new thing today because of what happened over the 1932-1968 period.

Up to 1932 the Democrats were the Red party. This is why the early entries in Table 1 on the Red side were Democrats, while those on the Blue side were Republicans. Then a shift occurs and Red heroes are Republicans and the Blue heroes are Democrats. The reason for this shift has to do with the horizontal axis in the political spectrum in Figure 1. Because of the differences between the economies of the agrarian South and commercial North, elite views on economic policy had gone hand-in-hand with regional culture. Tariffs aided Blue state urban industries at Southern agrarian elite expense. Central banking provided the means to fund public projects like wars, canals, and ports that served Blue state commercial interests. Naturally, Red elites opposed both.

During the 19^th century, there were non-elites on the economic left and right in both Blue and Red America. Big Banks who favored central banking and the gold standard oppressed farmers, generating opposition such as the 1890’s Populists as I previously described. Before the Populists there had been the Greenback Party in the 1870’s with the same complaint and before that Jackson’s “war” against central banking in the 1830’s. In each, the enemy was the “money power” of (financial) elites to oppress the powerless, which is a classic leftist stance. Thus, historians like Arthur Schlesinger classified the Jackson administration as liberal and the gold-standard-supporting Republicans as conservative. So they were, on the economic axis, but all these anti-bank, populist Leftists were also quite Red, and would be seen as on the Right today.

The Blue businesses who benefitted from Republican trade policy also oppressed workers, generating opposition in the form of trade unions and socialist-labor parties. These opponents were also on the Left economically but were also culturally Blue city-dwellers. So, while the Red Left evolved into the MAGA Republicans of today, the Blue Left became today’s “woke” progressives. The strongest disagreements between these two factions today are largely on cultural issues (i.e. the vertical axis in Figure 1).

Until 1932, the two major parties were Red and Blue parties, each with (economically) liberal and conservative wings. So there were liberal/progressive Republicans like Greely, T. Roosevelt, and Lafollette, and conservative “Bourbon” Democrats like Tilden and Cleveland. In 1933 Franklin Roosevelt, who labeled himself as a liberal Democrat, began the New Deal. The New Deal was a political program as well as an economic one. As I note in this post, Roosevelt created a coalition of Red and Blue working-class Americans by creating a real economic benefit for roughly half of all workers, clearly labeling it, and then telling them in real time what he was doing in order that the positive benefits they were seeing or hearing about would be linked to his New Deal brand. Democrats rode this brand to five successive electoral victories and established the New Deal Order.

Roosevelt made the Red party unabashedly (economically) liberal. Early actions by the New Dealers were to abolish the classical gold standard and establish a monetary management capacity independent of the central bank with the Gold Reserve Act. This was in accordance with what Red Amercian leftists from Jackson to Bryan had called for. But he soon moved on to intervening with the employer-employee relationship in ways consistent with what Blue American leftists wanted. He embraced unions, which Southern racists opposed, as they thought this might benefit black people. The racists were right; the New Dealer-created National War Labor Board (NWLB) did aid black people right under the racist’s noses (America in Crisis p 31):

…the NWLB allowed increases that eliminated wage differences across plants. These actions allowed employers to raise the wages of workers earning wages lower than the industry-norm (many of them black). This had a positive impact on the wages for black men, which rose from 48% to 57% of white men’s wages over the 1940’s.

In doing this, Roosevelt rebranded the Democratic party as an (economically) Left Workers party, something more akin to the British Labor Party and his Republican opponents as the party of Big Business and the Rich, that is, on the Right side of the political spectrum in Figure 1. Thus, the political split shifted from Red-Blue vertical axis to the Right-Left horizontal axis for more than a generation.

The Republican party began as an amalgam of four political factions: Whigs, Free Soilers, Know Nothings and Abolitionists. From the Whigs they had inherited commercial, industrial and financial elites, who favored economically conservative pro-business policy, as a major constituency. Their Abolitionist roots made them more socially progressive and for their Free Soiler constituency they supported welfare programs like the Homestead Act. Finally, they inherited an anti-immigrant stance from the Know Nothings. Defections from the party by Progressive factions during the Bull Moose campaign in 1912 and LaFollette’s Progressive Party run in 1924 helped to push Republicans in an economically conservative direction, epitomized by this famous misquote of President Coolidge: “The business of America is Business.” The Republican brand moved solidly onto the right half of Figure 1 in reaction to what they saw as radical New Deal policies. As supporters of Prohibition and authors of the early 1920’s immigration restrictions, they had significant support from people in the lower right quadrant outside of the South as well as their core support in the upper right quadrant. Before Democrats abandoned their New Deal the left side of Figure 2 was larger than the right side, Democrats had majority support and held the dispensation. The balance of power changed after the 1960’s for reasons described below.

Roosevelt himself was a progressive, and his wife even more so. Many of the technocrats running his programs were progressives who were not only economically left, but also culturally Blue. As a side effect of embracing an economically left agenda (e.g. the NWLB rules mentioned earlier) the New Dealers directly benefited Black people (who acknowledged this by shifting their support from Blue-conservative Republicans to a Red-liberal Democrats). New Dealers followed this with policy that further put them at odds with racists such as the integration of the military in 1948 and 1960’s civil rights legislation. The first of these prompted Southern Democrats to break with the party to support South Carolina governor Strom Thurmond’s presidential run in 1948. Thurmond would leave the party for good after the 1964 Civil Rights Act. Southern Democrats bolted a second time in 1968 to support the presidential run of Alabama governor George Wallace. Clearly a divide was growing between core Red consistencies and the Democratic party. One of these defectors was Ronald Reagan, who claimed, I didn’t leave my party, my party left me.

As I previously discussed, both parties adopted forms of identity politics after the 1960’s to attract voters with little interest in their economic offerings, with the Democrats pursuing Blue constituencies and Republicans Red. This resulted in a Republican party increasingly based in the lower right quadrant. Because Red is larger than Blue, Republicans have been able to remain competitive while increasingly operating from a single quadrant.

Just as they had once absorbed the Democratic Free Soilers, Republicans absorbed the Wallace Democrats in the 1970’s. In 1980, the Democrats were the economically progressive Blue party, and the Republicans the economically conservative Red party. Since 1980 Democrats have spread out along the entire upper half of Figure 2 by embracing neoliberalism. In doing so they have been able to balance Republican power. Republicans continue to hold the dispensation because the sort of watered-down economic liberalism coupled with Blue cultural offerings by the Democrats simply does not have the popularity to establish a new dispensation.