Why the Left's Own Thinkers Predict New York Mayor Zohran Mamdani Will Fail

The modern American city is structured to attract capital, not to defy it.

I’m a fan of capitalism. But many people aren’t, so it’s probably not possible to use capitalist arguments to convince them that Zohran Mamdani-style DSA (Democratic Socialists of America) populism is unlikely to work in cities.

However, a number of left-wing thinkers have provided powerful ideas of their own that can help us understand, within a left-wing framework, why the “socialism in one city” of DSA leaders like Zohran Mamdani is unlikely to succeed in its policy ambitions.

First, consider the larger ambition of the DSA, which is for the traditional socialist aim of public ownership of the means of production. Their constitution says, “We are socialists because we share a vision of a humane social order based on popular control of resources and production.” This is a problem right there. In an article on the separation of the economic and the political in capitalism, Ellen Meiksins Wood shows the difficulty. Under feudalism, political and economic exploitation are united. The lord directly extracts uncompensated labor on his own demesne from the serf, for example. In capitalism, the political and the economic become separated. Economic exploitation, from a left point of view, happens in a domain separate from politics properly so-called. It seems to be a natural phenomenon like the weather, not a political one. (If you read this essay, skip to the section “The ‘Economic’ and the ‘Political’ in Capitalism”).

While politics can still intrude into the economy, it’s often only to support the capitalist structure of the economy, which is thus at least partially insulated from political interference. In the United States, for example, the sanctity of private property and the inviolability of contracts are written into the Constitution. Thus, achieving the DSA’s objectives would require overthrowing the constitutional order. In fact, we see that they recognize that and explicitly call for overturning core elements of the Constitution, including abolishing the Senate, and eliminating the separation of powers by making the executive and judicial branches subject to the legislature in a quasi-parliamentary setup.

Mayors like Mamdani are thus extremely limited in what they can accomplish. Mamdani can’t expropriate the grocery stores of New York under the US Constitution. He can only open new city-owned ones in competition with them. But that competition will happen on capitalist terms. In a notoriously low-margin business like grocery, this will certainly be loss-making, requiring significant public subsidies to sustain them. (Rent regulation is one area Mamdani does have control over, but we’ll see how his actions here fare in the courts).

This was the same dilemma facing many historic American socialists, such as the ones who gained power in Milwaukee in the early 20th century. Their response was “sewer socialism,” literally building sewers in the city. This proved to be a very useful thing to do, and not socialism at all by our understanding. Many socialists of that era were critical of it for just that reason.

Mamdani likes to describe himself as a sewer socialist, but opening a handful of money-losing grocery stores isn’t it. His other ideas, like free buses and day care, will also require large sums of money. He wants to tax the rich to pay for these, but will discover that’s easier said than done.

To understand why, we can turn to Wendy Brown’s essay “Neoliberalism and the End of Liberal Democracy.” Brown notes that by “liberalism,” we mean two things: political liberalism (as in “liberal democracy”) or economic liberalism (in the European sense of a market-centric approach). In theory, it is possible to have political liberalism with some kind of Keynesian social democratic system rather than market-driven economic liberalism.

In her view, neoliberalism, rather than merely the adoption of liberal economic principles, is a normative rather than purely economic project. It seeks to actively reconstruct mindsets and institutions in all domains of society to operate on the principles of the market actor. She writes, “Neoliberal rationality, while foregrounding the market, is not only or even primarily focused on the economy; it involves extending and disseminating market values to all institutions and social action, even as the market itself remains a distinctive player.”

This extension of market logic affects not just institutions, but even individuals themselves. She writes:

Other evidence for progress in the development of such a [neoliberal] citizenry is not far from hand: consider the market rationality permeating universities today, from admissions and recruiting to the relentless consumer mentality of students as they consider university brand names, courses, and services.

Her emphasis here is as much on the universities as on the students, but I think of how much of childhood today - from “enrichment” activities to extracurriculars to a student starting a non-profit or “doing research” - is structured around the competitive activity of getting into various schools. Or think about, for example, how we often think of ourselves as having a “personal brand.” Social media puts us in a competition for eyeballs, and encourages people to treat what would have been their private life as content to be monetized. We see finding a spouse as participating in a “relationship market.” The Wall Street Journal talked about how young people are now tracking and evaluating their dates using a spreadsheet. We now conceive of our lives in market terms, as producers and consumers, to such an extent that we aren’t aware of it. It sounds completely natural. It is a deeply ingrained psychology.

Brown notes that this has profound implications for our public life, in that it undermines the idea of the demos, and thus political liberalism itself (Her later book on this topic was called Undoing the Demos). She writes:

The model neoliberal citizen is one who strategizes for her- or himself among various social, political, and economic options, not one who strives with others to alter or organize these options. A fully realized neoliberal citizenry would be the opposite of public-minded; indeed, it would barely exist as a public. The body politic ceases to be a body but is rather a group of individual entrepreneurs and consumers . . . which is, of course, exactly how voters are addressed in most American campaign discourse.

Part of the appeal of Mamdani-style neo-socialism is precisely in its attempts to restore the idea of the citizens as a political community in a particular place joined by bonds other than just transactions. Conservatives can laugh at his talk about the “warmth of collectivism,” but the feeling this speaks to is echoed in many conservative critiques about the decline of institutions and voluntary associations, churches, family formation, having children and other sources of extra-market meaning. The loss of these “havens in a heartless world” is clearly harmful to society, leaving people atomized, alienated, and open to more radical politics. Conservatives often valorize these kinds of associations, but don’t have a program to revive them on par with, for example, their ideas about how to structure the economy or the administrative state. They tend to be treated as cultural items that exist beyond the realm of policy or outside the ability of any intentional, structured program of civic renewal. Mamdani’s politics speaks to this need. It’s unsurprising that his supporters view his approach and program as one of moral renewal. Portraying his appeal as merely about “free stuff” is a mistake.

Unfortunately for Mamdani, under neoliberal logic, the state itself has been reconstructed as a market actor. Brown says:

The state itself is enfolded and animated by market rationality: that is, not simply profitability but a generalized calculation of cost and benefit becomes the measure of all state practices. Political discourse on all matters is framed in entrepreneurial terms; the state must not simply concern itself with the market but think and behave like a market actor across all of its functions.

Brown emphasizes the national government here, but the same applies to an even greater degree to municipal government. The Chicago socialist labor lawyer and activist Ramsin Canon examined this in a 2013 essay called “The Mayor as Entrepreneur-in-Chief”:

What we’re feeling viscerally, but seeing from too close to appreciate, is the logical end of decades of neoliberalization of government, which has transformed a managerial state into an entrepreneurial one. Our Mayors are now “entrepreneurs-in-chief,” and the result is that governance has been transformed from a participatory process of pooling resources and regulating behavior for the public good into one of government by private negotiation and enticement of capital through competition between states, cities, and even neighborhoods.

Canon points to changes in federal policy that reduced funding for critical urban needs. One might note the end of federal revenue sharing in the 1980s, money cities had broad discretion over how to spend. Federal aid is now typically very restricted in what it can be used for, and is often project-oriented. The federal government now gives only capital grants to transit agencies, for example, whereas it used to supply operating support as well. Canon also cites trade policies that subjected cities to greater economic competition. One could add that state and federal law typically severely limit the kinds or amounts of taxes municipalities can raise in any case.

With limited general support from the federal or state government, cities are forced to mostly rely on their own revenue sources, primarily taxes and fees. And each city finds itself competing in a marketplace with other cities for businesses and residents who can pay those taxes. They must behave entrepreneurially to creatively raise revenue without affecting their competitive position when it comes to taxes, and to attract investment. This often involves transactions like privatization - Chicago’s asset privatizations being a major subject of Canon’s essay - or techniques like tax abatements or tax increment financing (TIF). Conservatives tend to deride the latter as corporate welfare, but miss that there is a legitimate competitive element between locations that businesses are leveraging to extract concessions. While factors like talent dominate, there’s seldom just one viable choice of where to invest, and subsidies do matter on the margin.

Canon puts it like this:

Why not raise property or luxury taxes, or institute a city income tax, to make up the deficit [during the Great Recession instead of privatizing its parking meters]? Why not divert money from the TIF districts?

See above; Chicago is no longer a political community, it is an economic entity that is in competition with other cities in the region, in the state, across the world. In that mental framework, tax is cost, or price. You raise prices, you drive away your clients. In the case of the neoliberal city, the client is the developer, the investor, the employer. The federal government and the state are not going to give the city any real money; they are not investing in infrastructure, or education, or social welfare in any real way, the way they did up through the late 1970s and 1980s. The name of the game is “growth” through enticement of capital. And capital plays the game perfectly. [emphasis added]

I note again that the opposition between “political community” and “economic entity” here does not include the other forms of community that have badly atrophied, ones that used to create thick webs of identity, belonging, meaning, and non-neoliberal forms of life in cities: religious communities, fraternal societies, bowling leagues, etc. Political community is not the only alternative to the naked marketplace.

The implication here, however, is that today’s neo-socialists can’t just tax the rich or big business in order to fund their dreams. Taxation levels are disciplined by a competitive marketplace. Cities that tax to make investments that can generate a return, say on a needed piece of infrastructure, or some amenity that will attract high-end residents, will do well. But levying taxes in order to subsidize money-losing grocery stores is likely only to worsen a city’s competitive position, undermining it fiscally. As Brown also noted, the basis of governmental legitimacy in today’s world is often deeply tied to the delivery of economic growth, so policies that lead to an exit of business or declines in investment have a big affect on public sentiment, even in liberal cities like New York.

There’s nothing intrinsic to municipal government that necessitates this fiscal regime. One could imagine cities being heavily funded by federal or state intergovernmental transfers, insulating them from the need to operate in this mode of fiscal competition. On the left’s own account, capital has constructed this environment to ensure that cities are subjected to these kinds of market pressures for its own benefit.

The net result is that Zohran Mamdani’s room for maneuver is very limited. His legal ability to raise taxes is constrained by the state. Gov. Kathy Hochul isn’t giving him the billions of dollars in tax increases on the rich he wants. Even if he could raise taxes significantly, at some point the market would render a judgment on that. The fact that several deca-billionaires left California when a proposed wealth tax was put on the ballot shows that. Hence he’s reduced to trying to target immobile capital, as with his pied-à-terre tax on non-primary residences in the city. But he’s not going to be able to finance free buses with that - notwithstanding that it’s the state-controlled MTA that sets bus fares anyway, not the city. Undoubtedly New York City has leverage to raise taxes in a way that few other cities do. More workaday cities that imitate New York’s policies are likely to see very bad results. But even New York’s leverage is not unlimited, particularly when taxes there are already high.

As with Chicago, the go-to move Mamdani is already making is the financial gimmick, such as deferring pension payments. This isn’t likely to end well if it continues in New York, either. Even some of his fellow socialists described his failure to fully fund pensions as advancing a “Wall Street austerity agenda.” Even if he’s able to fund his priorities for a time, and the public is delighted, it will be at the price of so compromising the city’s financial condition that, like Chicago, it will find itself subjected to a regime of involuntary austerity that leaves services worse off than they were originally, and hobbles the city’s ability to invest for potentially decades to come. The city isn’t there yet, but establishing a pattern of deferring pension contributions is not a place the city wants to go.

Mamdani is already discovering the limits to his own power that are built into the nature of municipal government in America, the way that state governments and other entities constrain what he can do, and the relentless pressure of the marketplace. His socialism in one city project is simply not viable in terms of being able to accomplish its objectives so long as America’s cities are subjected to a regime of neoliberal competition through being required to self-finance their operations via local revenue raising.

In other words, the idea that the marketplace constrains the ability of someone like Mamdani to do what he’s promised to do isn’t a conservative fever dream; it’s a simple reality of how capital operates in America today. Supporters might argue that what they are doing is building a broader national movement that will achieve its objectives, but urban leaders who promise the moon and don’t deliver will soon find their movements discredited, as the reversal of Covid-era hard progressivism in many cities will already attest.

Cover image: New York City subway fare gates by Ray Raimundi / MTA, CC BY 2.0