Biden’s Infrastructure Plan and the Decline of American Capitalism

On March 31, President Biden announced his proposal for a $2 trillion infrastructure initiative, the American Jobs Plan. Speaking in Pittsburgh, he described a program which, if passed, would be the biggest government expenditure in decades, a “once in a generation investment.”

“It’s not a plan that tinkers around the edges,” the president said, comparing its scope to the building of the interstate highway system in the 1950s and the Space Race in the 1960s. “This is not to target those who have ‘made it,’ not to seek retribution. This is about opening opportunities for everybody else.”

The plan is divided into four main parts. $621 billion would be spent on transportation infrastructure such as roads, bridges, railways, ports, airports, waterways, and electric vehicles. $650 billion would go towards modernizing homes and schools, and the infrastructure necessary to sustain them, such as water and broadband internet. $400 billion is earmarked to provide care to elderly and disabled people. Lastly, the plan allocates $300 billion to invest in research and development and worker training, particularly in advanced industries such as semiconductor manufacture, artificial intelligence, 5G, and biotechnology.

Explaining the goals of the plan, The White House press release states that “The American Jobs Plan is an investment in America that will create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China.” Additionally, the plan sets out to address racial injustice and climate change, both of which are, indeed, intimately linked to infrastructure. To pay for it, the administration proposes raising the corporate tax rate from 21% to 28%—which is shy of the 35% rate that had been in place for decades before Trump’s tax cuts in 2017.

As of now, there is not any actual legislation on the table, and further behind-the-scenes horsetrading will determine what will actually be included and how to fund it. Biden also plans to introduce a second plan soon, the American Families Plan. We will have to see how these proposals play out over the coming weeks and months. However, if passed, it would certainly represent the most significant government investment in the economy in decades. It is therefore important for revolutionary socialists to draw a balance sheet of the plan, and place it in its appropriate context.

Joe Biden
As President Biden announced his proposal for a $2 trillion infrastructure initiative, socialists should draw a balance sheet of the plan and place it in its appropriate context. / Image: Gage Skidmore via Wikimedia Commons

Decades of infrastructural decay

Across the political spectrum, no one denies that the United States’ infrastructure is in need of serious repairs. A significant proportion of the country’s roads, bridges, and water supply systems were built in the 1950s or earlier, and federal infrastructure investment has been cut for decades, resulting in widespread decay—rusting and collapsing bridges, fissured roads, and faulty water systems, to name a few examples. Some counties still have lead pipes delivering drinking water. Airports, seaports, and waterways are also in desperate need of an overhaul to catch them up to their current usage. Taken as a whole, America’s infrastructure is woefully degraded and insufficient for the growing population’s needs.

Nationwide, 43% of public roadways are considered to be in “poor or mediocre” condition. The average age of America’s dams is 57 years. In Michigan—a microcosm of America’s infrastructure crisis—just one quarter of the state-owned bridges are considered to be in good condition. Hundreds of rural bridges across the country are indefinitely closed due to age or dilapidation. Tellingly, the richest country on earth received a “C-” from the American Society of Civil Engineers in their 2021 Report Card for America’s Infrastructure.

Not for nothing did Bernie Sanders’s call for a jobs program to fix our “crumbling infrastructure” resonate with so many people during his 2016 and 2020 presidential campaigns. In fact, Trump also called for an infrastructure program in his 2016 campaign, and in doing so, he is not alone in his party. Across the board, Republican and Democratic politicians favor some kind of program to rebuild the backbone of the capitalist economy. However, Republicans are virtually unanimously opposed to Biden’s plan, which they describe as a Trojan horse for higher corporate taxes to fund projects they do not consider to be infrastructure related.

shows oroville dam spillway in 2017
The Oroville Dam spillway in 2017 reflected the decay and dilapidation of America’s infrastructure. / Image: Dan Brekke via Flickr

Capitalist public works

Given Biden’s political history—not to mention his promise that “nothing would fundamentally change” if he were elected—some on the left might have been surprised to hear about Biden’s proposal, which at first glance appears to be quite bold, at least within the confines of capitalist policies. Additionally, many people alive today have never seen a serious government investment in infrastructure. In recent decades, the mantra of “small government” has dominated the outlook of both parties, and Biden’s plan indicates a break from that approach.

But in the broad view of the history of capitalism, Biden’s plan is nothing new, and certainly not revolutionary. Throughout history, the capitalist state has periodically invested public funds in certain areas which enable the rest of the economy to function properly. Without adequate bridges, roads, canals, and water systems, it would be impossible to transport raw materials, consumer goods, waste, troops, and labor power. The Erie Canal, transcontinental railroad, and interstate highway system are examples of the kinds of investments the ruling class will make to grease the wheels of commerce and facilitate their control over this continent-wide country.

The investments needed for the economy differ depending on the level of historical development. For instance, in the advanced capitalist countries, the capitalist class maintains public education systems, since the capitalists have a need for an educated working class that can perform more skilled labor. In this sense, Biden and co.’s inclusion of “non-traditional infrastructure” such as broadband internet shows a bit more foresight than those politicians who want to limit investment to traditional infrastructure such as roads and bridges.

For these reasons, the capitalist class has generally voiced enthusiasm for the plan. Of course, some industries would benefit directly, including those related to construction, communications, transportation, and energy. But aside from those companies, it’s hard to imagine that any CEO would be opposed to better roads, faster internet, and all the other upgrades that the plan would bring to the table. Needless to say, however, their “preference” would be to force the working class to shoulder as much of the burden as possible, and corporate lobbyists have already made it clear that they would like to find “other ways” of paying for it.

Monument of first transcontinental railroad in Colfax
Capitalists have invested in infrastructure like the transcontinental railroad to facilitate the transport of raw materials, consumer goods, waste, troops, and labor power across the continent.  / Image: Colfaxteri via Wikimedia Commons

Creating jobs, rebuilding infrastructure, and out-competing China

Over the past year we have witnessed an exacerbation of the already massive gulf between the rich and poor. Millions of people have lost their jobs, and the official figures obscure the fact that many more have given up looking, or are insufficiently employed. This has occurred in the context of the long-term decline in the strength of US imperialism, which is anxious as it watches Chinese imperialism growing in strength and influence.

Speaking about China in February, Biden told a group of senators “They’re investing billions of dollars dealing with a whole range of issues that relate to transportation, the environment and a whole range of other things. We just have to step up,” adding that “If we don’t get moving, they are going to eat our lunch.”

As occurred during the Space Race with the Soviet Union, the administration hopes to use the plan to “catch up” and then “leap ahead” of Chinese capitalism. Such a project would have the convenient bonus of “delivering results” domestically by creating jobs, as well as repairing the shattered illusion that the Democrats are the “party of the working class.”

With his talk of raising corporate tax rates, making tax loopholes impossible, introducing a global minimum tax, and cutting other tax exemptions to fund the proposal, Biden has been called “quietly radical.” But far from having suddenly “seen the light” and coming around to understanding the virtues of “taxing the rich,” his plan indicates the Democrats’ understanding of the need to inconvenience a few capitalists for the overall good of the system. Imperialist anxiety and awareness of the growing discontent at home are more than sufficient motivators for this kind of policy switch.

Of course, it would not be a bad thing if the United States’ abysmal infrastructure received a much-needed overhaul. But as always, the key question is not only who will benefit but who will pay? Despite the initial proposal to finance the project through corporate taxes, the administration has already indicated openness to negotiation in this regard. Marxists vehemently oppose any efforts to put the costs onto the working class, whether through direct taxation, “user fees,” or any other obscured attempts to make our class pay.

For its part, the AFL-CIO must prepare to fight against any such attempts, rather than passively applaud the proposal, as they have done so far. The capitalists should be made to pay 100% of the costs of this program, which should be expanded far beyond its current scope.

Full employment at high wages can be achieved if  all the contractors are required to use 100% union labor. Union-controlled hiring halls should be established in every working-class neighborhood, starting with those suffering the highest unemployment. Any such program should be guided by the workers doing the actual work, as well as  representatives of the broader working class. And if the capitalists refuse to pay or to abide by the workers’ conditions for how such a program should be implemented, their companies and their wealth should be expropriated and put to use for the public good as part of a nationalized, democratically planned economy.

Trumka AFL-CIO business unionism
The AFL-CIO must prepare to fight against any attempts to make the working class foot the bill, rather than passively applaud the proposal, as they have done so far. / Image: Public Domain

“Everything must change, so that everything can stay the same”

As of now, the American public is divided over the American Jobs Plan, at least in name. 36% of the population favors it, 33% oppose it, and 31% are undecided. Interestingly, however, the details of the plan garner wider support. For instance, 87% of Americans support the proposal to fix roads and bridges. And significantly, the Senate parliamentarian has indicated that this plan could be passed through reconciliation—in other words, through the simple majority that the Democrats currently hold in that chamber.

If implemented, the plan could temporarily reflate illusions in the viability of capitalism among some layers of the population. As the Financial Times astutely observed in a December editorial, “Franklin Roosevelt, John Maynard Keynes, and other founders of the postwar order realized as early as the 1930s, capitalism’s political acceptability requires its adherents to polish off its rougher edges.” As always throughout history, the liberals are eager to take this advice.

We will continue to watch the proposal play out. Whatever the end result, it is significant that after decades of downplaying the role of government in the economy, the crisis of capitalism and the class struggle have pushed “moderate” “Scranton Joe” into trying to play this kind of role.

In trying to save the system from itself, the administration might be forced to go to surprising lengths. But unfortunately for them, the state of the country’s infrastructure is not simply the product of chronic “underinvestment” by past administrations. It is a reflection of the fundamental decline of the system as a whole, which has been ongoing for decades—a phenomenon which no set of policies, no matter how far-reaching they may appear, will be able to address within the framework of capitalism.

Marxists agree that the country’s infrastructure is in dire need of repair. By properly harnessing humanity’s resources and technology, we could build highly sophisticated transportation and communications systems, care for everyone in need, and much more. But to do this, the working class must rebuild that system on its own terms—with a democratically planned economy under a workers’ government. In collaboration with the international working class, we could build the kind of advanced global infrastructure upon which to plan an economy to provide jobs, healthcare, and housing for everyone.

Want to get involved? Drop us a line to join the fight for socialism in our lifetime:

Click to Donate